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Cash by any other name? Evidence on labeling from the UK Winter Fuel Payment

Beatty, TKM and Blow, L and Crossley, TF and O'Dea, C (2014) 'Cash by any other name? Evidence on labeling from the UK Winter Fuel Payment.' Journal of Public Economics, 118. 86 - 96. ISSN 0047-2727

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Abstract

Government transfers to individuals are often given labels indicating that they are designed to support the consumption of particular goods. Standard economic theory implies that the labeling of cash transfers or cash-equivalents should have no effect on spending patterns. We study the UK Winter Fuel Payment, a cash transfer to older households. Our empirical strategy nests a regression discontinuity design within an Engel curve framework. We find robust evidence of a behavioral effect of labeling. On average households spend 47% of the WFP on fuel. If the payment were treated as cash, we would expect households to spend 3% of the payment on fuel. © 2014 Elsevier B.V.

Item Type: Article
Subjects: H Social Sciences > HJ Public Finance
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Tom Crossley
Date Deposited: 20 Dec 2014 14:59
Last Modified: 17 Aug 2017 17:42
URI: http://repository.essex.ac.uk/id/eprint/12155

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