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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.
Authors
Laura Blow
Research Fellow University of Michigan
Tom is a Research Fellow at IFS, a Research Professor for the Institute for Social Research at the University of Michigan.
Research Associate Yale University
Cormac is a Research Associate of the IFS, an Assistant Professor of Economics at the Yale University and Research Fellow at the NBER.
Research Associate University of Minnesota
Working Paper details
- DOI
- 10.1920/wp.ifs.2011.1110
- Publisher
- IFS
Suggested citation
Beatty, T et al. (2011). Cash by any other name? Evidence on labelling from the UK Winter Fuel Payment. London: IFS. Available at: https://ifs.org.uk/publications/cash-any-other-name-evidence-labelling-uk-winter-fuel-payment (accessed: 26 April 2024).
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