Consumer behaviour

We investigate the impact on social welfare of the United Kingdom (UK) policy introduced in 1980 by which public housing tenants (council housing in UK parlance) had the right to purchase their houses at heavily discounted prices. This was known as the Right to Buy (RTB) policy. Although this internationally-unique policy was the largest source of public privatization revenue in the UK and raised home ownership as a share of housing tenure by around 15%, the policy has been little analyzed by economists. We investigate the equilibrium housing policy of the public authority in terms of quality and quantity of publicly-provided housing both in the absence and presence of a RTB policy. We find that RTB can improve the aggregate welfare of low-income households only if the council housing quality is sufficiently low such that middle-wealth households have no incentive to exercise RTB. We also explore the welfare effects of various adjustments to the policy, in particular (i) to reduce discounts on RTB sales; (ii) to loosen restrictions on resale; (iii) to return the proceeds from RTB sales to local authorities to construct new public properties; and (iv) to replace RTB with rent subsidies in cash.

We present a method to estimate preferences in the presence of unobserved choice set heterogeneity.

This paper studies the first nationwide introduction of automatic enrolment, in which employers in the United Kingdom are obliged to enrol employees into a workplace pension scheme, which employees can then choose to leave if they wish.

This paper exploits the gradual roll-out of the obligation for employers to enrol their employees into a pension to estimate its effect on how much is saved in workplace pensions for private sector employees.

The combination of credit constraints and indivisible consumption goods may induce some risk-averse individuals to gamble to have a chance of crossing a purchasing threshold.

In this paper we document significantly steeper declines in nondurable expenditures in the UK compared to the US, in spite of income paths being similar. We explore several possible causes, including different employment paths, housing ownership and expenses, levels and paths of health status, number of household members, and out-of -pocket medical expenditures. Among all the potential explanations considered, we find that those to do with healthcare—differences in levels and age paths in medical expenses—can fully account for the steeper declines in nondurable consumption in the UK compared to the US.

Reforms to public services have extended consumer choice by allowing for the entry of private providers. The aim is to generate competitive pressure to improve quality when consumers choose between providers. However, for many services new entrants could also affect whether a consumer demands the service at all. We explore this issue by considering how demand for elective surgery responds following the entry of private providers into the market for publicly funded health care in England.

This paper studies the differential effect of targeting cash transfers to men or women on the structure of household expenditures on non-durables.

We use Italian micro data to investigate how consumers reacted to the Great Recession.

The rise in obesity has largely been attributed to an increase in calorie consumption. We show that official government household survey data indicate that calories have declined in England between 1980 and 2013; while there has been an increase in calories from food out at restaurants, fast food, soft drinks and confectionery, overall there has been a decrease in total calories purchased.

Anti-smoking policies can in theory make smokers better off, by helping smokers with time-inconsistent preferences commit to giving up or reducing the amount they smoke. We use almost 20 years of British individual-level panel data to explore the impact on self-reported psychological well-being of two policy interventions: large increases in tobacco excise taxes and bans on smoking in public places. We use a difference-in-differences approach to compare the effects on well-being for likely smokers and non-smokers. We find robust evidence that increases in tobacco taxes raise the relative well-being of likely smokers. Exploiting regional variation in the timing of the smoking ban across Britain, we find no evidence that it raised smoker well-being. Our findings give some support to the view that tobacco taxes are at least partly justifiable because of the benefits they have for smokers themselves.