Shopping therapy? Incentive payments and tenant behaviour: Lessons from underoccupation schemes in the United Kingdom

There has been in recent years considerable emphasis on market-oriented reforms and consumer empowerment measures within British social and housing policy. Underlying many such initiatives is a model of human action and motivation based on rational choice theory. Proposals for the introduction of 'shopping incentives' within Housing Benefit are a prominent current example of this trend. This paper reflects on these developments by examining evidence from an experiment undertaken by the Department for Work and Pensions in three London boroughs to provide underoccupation incentive payments. The objective of this programme was to encourage 'underoccupying' council tenants receiving Housing Benefit to relocate to smaller properties. This was to be achieved by providing a financial incentive scaled to the net reduction in rent consequent upon the move. The analysis concludes that the relatively small financial inducements offered by this scheme had no impact on tenants' housing consumption decisions. Indeed, the findings suggest that financial incentives may be too crude to have any significant effect on tenants' behaviour, and rational choice models which pay insufficient attention to the social context shaping relocation decisions are unlikely to succeed.