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

  • 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)

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.

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File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_1216.pdf
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Paper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 1216.

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Length: 33 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:koc:wpaper:1216
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  4. Timothy K.M. Beatty & Laura Blow & Thomas Crossley & Cormac O'Dea, 2011. "Cash by any other name? Evidence on labelling from the UK Winter Fuel Payment," IFS Working Papers W11/10, Institute for Fiscal Studies.
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