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Cash by Any Other Name? Evidence on Labelling from the UK Winter Fuel Payment

Author

Listed:
  • Timothy K.M. Beatty

    (University of Minnesota)

  • Laura Blow

    (Institute for Fiscal Studies)

  • Thomas Crossley

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

  • Cormac O’Dea

    (Institute for Fiscal Studies)

Abstract

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.

Suggested Citation

  • Timothy K.M. Beatty & Laura Blow & Thomas Crossley & Cormac O’Dea, 2012. "Cash by Any Other Name? Evidence on Labelling from the UK Winter Fuel Payment," Koç University-TUSIAD Economic Research Forum Working Papers 1216, Koc University-TUSIAD Economic Research Forum.
    • Handle: RePEc:koc:wpaper:1216
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    labelling; benefits; expenditure.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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