This paper reports the results of a study which compared the effectiveness
of a tea bag and a $1 coin as prepaid Incentives in a mail survey of the ge
neral public. The tea bag had no effect on response rate but the dollar coi
n produced a significant increase in response of more than 7%, confiming th
e efficacy of this type of incentive. The paper points out that it is impos
sible to generalise about the cost-effectiveness of prepaid monetary incent
ives, except to say that they are most cost effective when questionnaire, s
tationery and postage costs are high and labour costs are low. However, if
a no-incentive response rate is acceptable for a mail survey, a small prepa
id incentive with one reminder letter is the most cost effective way of spe
nding a limited research budget.