Cost Liability and Residential Space Heating Expenditures of Welfare Recipients in Germany* |
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Authors: | Katrin Rehdanz Sven Stöwhase |
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Affiliation: | 1. Christian‐Albrechts‐University of Kiel;2. Kiel Institute for the World Economy (katrin.rehdanz@ifw‐kiel.de);3. Fraunhofer Institute for Applied Information Technology FIT (sven.stoewhase@fit.fraunhofer.de) |
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Abstract: | Within the German welfare system, recipients’ heating expenditures are generally fully covered by the government. This paper empirically tests the hypothesis that households receiving welfare payments turn to overconsumption of residential space heating. We use micro‐data from two different data sources to explore whether the conditional heating expenditures of these households differ significantly from those of other households. Our empirical findings suggest that even when controlling for a range of other factors, this is indeed the case, as their heating expenditures lie about 7–8 per cent above those of other households. These results are fairly robust to sensitivity analyses. Comparing the results with those for a control group, expenditures for heating are still more than 5 per cent higher. Our results imply that there is potential scope for cost savings if this policy is changed. |
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Keywords: | social welfare Germany space heating economic incentives matching H23 H43 Q41 Q48 |
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