STUDY | 
Finance
 BEHAVIOR CHANGE

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

Beatty et al. (2011)
Summary by 
Mark Egan

The authors study the UK Winter Fuel Payment (WFP), a cash transfer to households aged over 60. The WFP can range from £100-£300 and is usually given in November / December. 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 but this is not the case here. Exploiting sharp eligibility criteria in a regression discontinuity design, the authors found evidence of a behavioural effect of the labelling. If households were given an unconditional, neutrally-named cash transfer of £100, they would be expected to spend £3 of it on fuel. If it is called Winter Fuel Payment, they spend an average of £41 on fuel.