Does Premium Version Adoption in mHealth Improve User Engagement and Health-Related Outcomes?

Freemium upgrade is a primary monetization lever for mHealth apps, yet whether paying for premium features actually sustains user engagement remains an open question. We study this question using large-scale data from a fitness-tracking mobile app with a staggered difference-in-differences design. Premium adoption generates an immediate increase in food and exercise tracking, caloric budget adherence, and exercise calories, but these effects attenuate within several weeks and do not translate into sustained weight loss. Sensitivity analysis and matched-sample designs confirm that the engagement responses are not solely driven by time-varying selection. Heterogeneous engagement lifts by preupgrade exposure are more consistent with hedonic decline than with sunk-cost effects or motivational mean reversion: users with limited prior exposure to the free version exhibit substantially larger postupgrade engagement lifts than those who have already interacted extensively with it. We further demonstrate that failing to account for endogeneity and selection in premium adoption leads to a substantial overstatement of its effects on both engagement and health outcomes.

History: Catherine Tucker served as the senior editor.

Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mksc.2022.0437.