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Is There a Heat or Eat Trade-off in the UK?

Author

Listed:
  • Timothy K.M. Beatty

    (University of Minnesota Institute for Fiscal Studies)

  • Laura Blow

    (Institute for Fiscal Studies)

  • Thomas F. Crossley

    (Koç University , University of Cambridge and Institute for Fiscal Studies)

Abstract

We merge detailed household level expenditure data from older households with historical local weather information. We then test for a heat or eat trade off: do households cut back on food spending to finance the additional cost of keeping warm during cold shocks? For households who cannot smooth consumption over time, cold weather shocks are equivalent to income shocks. We find evidence that the poorest of older households are unable to smooth spending over the worst temperature shocks. Statistically significant reductions in food spending are observed in response to winter temperatures two or more standard deviations colder than expected (which occur about one winter month in forty) and reductions in food expenditure are considerably larger in poorer households.

Suggested Citation

  • Timothy K.M. Beatty & Laura Blow & Thomas F. Crossley, 2011. "Is There a Heat or Eat Trade-off in the UK?," Koç University-TUSIAD Economic Research Forum Working Papers 1133, Koc University-TUSIAD Economic Research Forum.
    • Handle: RePEc:koc:wpaper:1133
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    File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_1133.pdf
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    References listed on IDEAS

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    1. Paxson, Christina H, 1992. "Using Weather Variability to Estimate the Response of Savings to Transitory Income in Thailand," American Economic Review, American Economic Association, vol. 82(1), pages 15-33, March.
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    3. Martin Browning & Thomas F. Crossley, 2009. "Shocks, Stocks, and Socks: Smoothing Consumption Over a Temporary Income Loss," Journal of the European Economic Association, MIT Press, vol. 7(6), pages 1169-1192, December.
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    Cited by:

    1. Beatty, Timothy K.M. & Tuttle, Charlotte, 2014. "The Effect of Energy Price Shocks on Household Food Security: Do Federal Assistance Programs Mitigate the Effects of Price Shocks," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170546, Agricultural and Applied Economics Association.
    2. Tuttle, Charlotte & Beatty, Timothy K. M., 2017. "The Effects of Energy Price Shocks on Household Food Security in Low-Income Households," Economic Research Report 260484, United States Department of Agriculture, Economic Research Service.
    3. Jakub Sokolowski & Aneta Kielczewska & Piotr Lewandowski, 2019. "Defining and measuring energy poverty in Poland," IBS Research Reports 01/2019, Instytut Badan Strukturalnych.
    4. Friedman, Chanoch & Becker, Nir & Erell, Evyatar, 2014. "Energy retrofit of residential building envelopes in Israel: A cost-benefit analysis," Energy, Elsevier, vol. 77(C), pages 183-193.
    5. Beatty, Timothy K.M. & Tuttle, Charlotte, 2012. "The Effect of Energy Price Shocks on Household Food Security," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124791, Agricultural and Applied Economics Association.
    6. Kennedy, Ryan & Mahajan, Aseem & Urpelainen, Johannes, 2019. "Quality of service predicts willingness to pay for household electricity connections in rural India," Energy Policy, Elsevier, vol. 129(C), pages 319-326.
    7. Tibor Szendrei & Arnab Bhattacharjee & Mark E. Schaffer, 2024. "Fused LASSO as Non-Crossing Quantile Regression," Papers 2403.14036, arXiv.org.
    8. Beatty, Timothy K.M. & Blow, Laura & Crossley, Thomas F. & O'Dea, Cormac, 2014. "Cash by any other name? Evidence on labeling from the UK Winter Fuel Payment," Journal of Public Economics, Elsevier, vol. 118(C), pages 86-96.
    9. Rodrigo Lluberas, 2018. "Life‐Cycle Expenditure and Retirees’ Cost of Living," Fiscal Studies, John Wiley & Sons, vol. 39(3), pages 385-415, September.
    10. Marlena Piekut, 2021. "Between Poverty and Energy Satisfaction in Polish Households Run by People Aged 60 and Older," Energies, MDPI, vol. 14(19), pages 1-30, September.
    11. Rodriguez-Alvarez, Ana & Orea, Luis & Jamasb, Tooraj, 2019. "Fuel poverty and Well-Being:A consumer theory and stochastic frontier approach," Energy Policy, Elsevier, vol. 131(C), pages 22-32.
    12. Castaño-Rosa, Raúl & Okushima, Shinichiro, 2021. "Prevalence of energy poverty in Japan: A comprehensive analysis of energy poverty vulnerabilities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    13. Mattioli, Giulio & Lucas, Karen & Marsden, Greg, 2018. "Reprint of Transport poverty and fuel poverty in the UK: From analogy to comparison," Transport Policy, Elsevier, vol. 65(C), pages 114-125.
    14. Morris, J. & Genovese, A., 2018. "An empirical investigation into students' experience of fuel poverty," Energy Policy, Elsevier, vol. 120(C), pages 228-237.
    15. Mattioli, Giulio & Lucas, Karen & Marsden, Greg, 2017. "Transport poverty and fuel poverty in the UK: From analogy to comparison," Transport Policy, Elsevier, vol. 59(C), pages 93-105.

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