A new study says people are wasting their money on gym memberships.

Boston researchers say consumers are overpaying for gym services because they overestimate how often they will use them. It says most people lack the discipline to visit the gym often enough to justify their membership costs.

"They end up being overconfident," said Ulrike Malmendier, co-author of the study, conducted by the University of Stanford's Graduate School of Business.

A three-year study of 8,000 gym membership records from the Boston area discovered 80 per cent of members with a monthly contract were better off if they had gone on a pay-per-use basis.

According to the findings;

• members went to the gym an average of less than five times per month
• average users were paying $17 per workout (as opposed to the $10 pay-per-use option)
• members were losing about $700 over the life of the gym contract

Researchers also found people cancel gym memberships months after they actually stop going, costing several hundred dollars.

"People take the monthly contract because they assume they are going to the club about two times a week or they hope the monthly option will motivate them to go more," said Malmendier.

The study says a number of gyms offer pay-per-use but don't often advertise it. Some have a "pass system" where there's an upfront fee for 10 trips to the gym, which is more economical.

Malmendier's research also analyzes how credit card, cell phone, video and mail order industries design contracts that take advantage of consumer self-control problems.