Labeling and spending

Labeling money transfers for a specific purpose can often influence how the recipient uses the money. Using survey data on household fuel consumption in a regression discontinuity design, it was shown that individuals in the survey who were above the threshold to receive a "winter fuel" payment (age 60) spend between 10% and 57% more on fuel than those just below the threshold. By labeling the payment as fuel money, spending might be more likely directed towards the labeled purpose.

Biases Used


Other Applications: Law Abiding Behavior, Employment and Work Performance, Education