Is There a Heat or Eat Trade-off in the UK?
AbstractWe 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.
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Bibliographic InfoPaper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 1133.
Length: 20 pages
Date of creation: Nov 2011
Date of revision:
Other versions of this item:
- NEP-AGR-2011-12-05 (Agricultural Economics)
- NEP-ALL-2011-12-05 (All new papers)
- NEP-BEC-2011-12-05 (Business Economics)
- NEP-ENE-2011-12-05 (Energy Economics)
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"Shocks, stocks and socks: smoothing consumption over a temporary income loss,"
CAM Working Papers
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