Within the German welfare system, heating expenditures of recipients are in general fully covered by the government. This paper empirically tests for the hypothesis that households receiving welfare payments turn to over consumption of residential space heating. We use microdata from two different data sources to explore whether conditional heating expenditures of these households significantly differ from those of other households. Our empirical findings suggest that even when controlling for a range of other factors this is indeed the case as heating expenditures lie about 10 percent above those of other households. These results are fairly robust to sensitivity analyses. Our results imply that there is potential scope for cost savings if this policy is changed.
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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers with number
31.
Length: 18 p. Date of creation: 2007 Date of revision: Publication status: Published in: Fiscal Studies 29 (2008) 3, 329-345 Handle: RePEc:diw:diwsop:diw_sp31
Find related papers by JEL classification: H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
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