Dr Laura Blow
Laura recieved her undergraduate degree in Economics from Cambridge University and then studied for a Masters degree in Economics at Oxford University. She worked at the Institute for Fiscal Studies whilst also studying for a PhD in Economics at University College London. She joined the University of Surrey as a full-time lecturer in August 2016
Areas of specialism
Laura is an applied microeconomist, with a particular interest in understanding the consumption choices of individuals, both theoretically and empirically. Her current research agenda focusses on how to test whether a set of observed choices was generated by a particular choice process on the consumers part. This builds on the well known results in revealed preference theory that established nonparametric tests of standard utility maximising behaviour. A particular area of current interest is in some of the main models associated with behavioural economics such as hyperbolic discounting, reference dependence and mental accounting.
This paper provides a revealed preference characterisation of quasi-hyperbolic discounting which is designed to be applied to readily-available expenditure surveys. We describe necessary and sufficient conditions for the leading forms of the model and also study the consequences of the restrictions on preferences popularly used in empirical lifecycle consumption models. Using data from a household consumption panel dataset we explore the prevalence of time-inconsistent behaviour. The quasi-hyperbolic model provides a significantly more successful account of behaviour than the alternatives considered. We estimate the joint distribution of time preferences and the distribution of discount functions at various time horizons.
Do households cut back on food spending to finance the additional cost of keeping warm during spells of unseasonably cold weather? For households which cannot smooth consumption over time, we describe how cold weather shocks are equivalent to income shocks. We merge detailed household level expenditure data from older households with historical regional weather information. We find evidence that the poorest of older households cannot smooth fuel spending over the worst temperature shocks. Statistically significant reductions in food spending occur in response to winter temperatures 2 or more standard deviations colder than expected, which occur about 1 winter month in 40; reductions in food expenditure are considerably larger in poorer households.
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.
Blow LE, Blundell R, A Nonparametric Revealed Preference Approach to Measuring the Value of Environmental Quality (2018) Environmental and Resource Economics