Is There a Heat or Eat Trade-off in the UK?

Timothy KM Beatty, Laura Blow and Thomas F. Crossley
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Laura Blow: Institute for Fiscal Studies

Koç University-TUSIAD Economic Research Forum Working Papers from Koc University-TUSIAD Economic Research Forum

Abstract: We merge detailed household level expenditure data from older households with historical local weather information. We then test for a heat or eat trade off: do households cut back on food spending to finance the additional cost of keeping warm during cold shocks? For households who cannot smooth consumption over time, cold weather shocks are equivalent to income shocks. We find evidence that the poorest of older households are unable to smooth spending over the worst temperature shocks. Statistically significant reductions in food spending are observed in response to winter temperatures two or more standard deviations colder than expected (which occur about one winter month in forty) and reductions in food expenditure are considerably larger in poorer households.

New Economics Papers: this item is included in nep-agr, nep-bec and nep-ene
Date: 2011-11
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Working Paper: Is there a "heat or eat" trade-off in the UK? (2011)
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Persistent link: http://EconPapers.repec.org/RePEc:koc:wpaper:1133

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