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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

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    Cited by:

    1. Angus Holford, 2015. "The labour supply effect of Education Maintenance Allowance and its implications for parental altruism," Review of Economics of the Household, Springer, vol. 13(3), pages 531-568, September.
    2. Cruz, Marcio & Ziegelhofer, Zacharias, 2014. "Beyond the income effect : impacts of conditional cash transfer programs on private investments in human capital," Policy Research Working Paper Series 6867, The World Bank.
    3. Dolan, P. & Hallsworth, M. & Halpern, D. & King, D. & Metcalfe, R. & Vlaev, I., 2012. "Influencing behaviour: The mindspace way," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 264-277.
    4. 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.
    5. Timothy K.M. Beatty & Charlotte J. Tuttle, 2015. "Expenditure Response to Increases in In-Kind Transfers: Evidence from the Supplemental Nutrition Assistance Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(2), pages 390-404.
    6. repec:eee:jhecon:v:58:y:2018:i:c:p:176-187 is not listed on IDEAS
    7. Tuttle, Charlotte, 2016. "The Stimulus Act of 2009 and Its Effect on Food-At-Home Spending by SNAP Participants," Economic Research Report 262193, United States Department of Agriculture, Economic Research Service.
    8. Grogan, Louise, 2018. "The Labeling Effect of a Child Benefits System: Evidence from Russia 1994-2015," IZA Discussion Papers 11962, Institute for the Study of Labor (IZA).
    9. repec:eee:wdevel:v:103:y:2018:i:c:p:100-118 is not listed on IDEAS
    10. Valatin, Gregory & Moseley, Darren & Dandy, Norman, 2016. "Insights from behavioural economics for forest economics and environmental policy: Potential nudges to encourage woodland creation for climate change mitigation and adaptation?," Forest Policy and Economics, Elsevier, vol. 72(C), pages 27-36.
    11. Jeffrey R. Brown & Arie Kapteyn & Erzo F.P. Luttmer & Olivia S. Mitchell & Anya Samek, 2017. "Behavioral Impediments to Valuing Annuities: Evidence on the Effects of Complexity and Choice Bracketing," NBER Working Papers 24101, National Bureau of Economic Research, Inc.
    12. repec:gam:jsusta:v:10:y:2018:i:6:p:2107-:d:153519 is not listed on IDEAS
    13. Flora Felso & Adriaan R. Soetevent, 2012. "How Consumers use Gift Certificates," Tinbergen Institute Discussion Papers 12-002/1, Tinbergen Institute, revised 27 Nov 2013.
    14. repec:eee:trapol:v:69:y:2018:i:c:p:170-178 is not listed on IDEAS
    15. repec:spr:empeco:v:53:y:2017:i:2:d:10.1007_s00181-016-1134-0 is not listed on IDEAS
    16. Emmanuel Tumusiime & B. Wade Brorsen & Jeffrey D. Vitale, 2014. "Vertical integration in West Africa's cotton industry: are parastatals a second best solution?," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 129-143, November.
    17. Bergolo, Marcelo & Galván, Estefanía, 2018. "Intra-household Behavioral Responses to Cash Transfer Programs. Evidence from a Regression Discontinuity Design," World Development, Elsevier, vol. 103(C), pages 100-118.
    18. Capacci, Sara & Mazzocchi, Mario & Shankar, Bhavani, 2012. "Evaluation With Inadequate Data: The Impact Of The French Vending Machine Ban," 2012 AAEA/EAAE Food Environment Symposium 123198, Agricultural and Applied Economics Association.
    19. Thomas F. Crossley & Federico Zilio, 2018. "The health benefits of a targeted cash transfer: The UK Winter Fuel Payment," Health Economics, John Wiley & Sons, Ltd., vol. 27(9), pages 1354-1365, September.
    20. Griffith, Rachel & von Hinke, Stephanie & Smith, Sarah, 2018. "Getting a healthy start: The effectiveness of targeted benefits for improving dietary choices," Journal of Health Economics, Elsevier, vol. 58(C), pages 176-187.
    21. Felső, Flóra Á & Soetevent, Adriaan R., 2014. "Broad and narrow bracketing in gift certificate spending," European Economic Review, Elsevier, vol. 66(C), pages 284-302.
    22. Waidler, Jennifer, 2016. "On the fungibility of public and private transfers: A mental accounting approach," MERIT Working Papers 060, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    23. repec:oup:apecpp:v:39:y:2017:i:3:p:516-532. is not listed on IDEAS
    24. Kooreman, Peter & Melenberg, Bertrand & Prast, Henriëtte M. & Vellekoop, Nathanaël, 2013. "Framing Effects in an Employee Savings Scheme: A Non-Parametric Analysis," IZA Discussion Papers 7154, Institute for the Study of Labor (IZA).
    25. John Yinger & Phuong Nguyen-Hoang, 2015. "The Behavioral Impacts of Poverty Tax Relief: Salience or Framing?," Center for Policy Research Working Papers 186, Center for Policy Research, Maxwell School, Syracuse University.

    More about this item

    Keywords

    labelling; benefits; expenditure.;

    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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