Cash by any other name? evidence on labelling from the UK Winter Fuel Payment

Beatty, Tom and Blow, Laura and Crossley, Thomas and O'Dea, Cormac (2011) Cash by any other name? evidence on labelling from the UK Winter Fuel Payment. Project Report. IFS, IFS website.

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Abstract

Standard economic theory implies that the labelling of cash transfers or cash-equivalents (e.g. child benefits, food stamps) should have no effect on spending patterns. The empirical literature to date does not contradict this proposition. We study the UK Winter Fuel Payment (WFP), a cash transfer to older households. Exploiting sharp eligibility criteria in a regression discontinuity design, we find robust evidence of a behavioural effect of the labelling. On average households spend 41% of the WFP on fuel. If the payment was treated as cash, we would expect households to spend approximately 3% of the payment on fuel.

Item Type:Working Paper (Project Report)
Uncontrolled Keywords:labelling, benefits, expenditure
Subjects:5. Quantitative Data Handling and Data Analysis > 5.5 Regression Methods
8. Research Management and Impact > 8.4 Research Policy
8. Research Management and Impact > 8.5 Evidence-Based Policy and Practice
ID Code:2980
Deposited By: PEPA User
Deposited On:01 Mar 2013 10:53
Last Modified:01 Mar 2013 10:53

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