When you give cash to homeless people, do they just waste it on alcohol, drugs and cigarettes? No, according to a new study that’s been covered favourably in Vox, the Washington Post and several other outlets. Yet there’s more to the study than its headline finding.
Ryan Dwyer and colleagues carried out an experiment in which 50 homeless people were randomly assigned to receive an unconditional cash transfer of 7,500 Canadian dollars. Another 65 homeless people served as controls. The two groups were then followed for a year to gauge the impact of the cash transfer.
As is increasingly common in social science, the researchers preregistered their analyses. What does this mean? Before collecting any data, they published a document online describing the analyses they intended to carry out. The rationale for preregistration is to demonstrate that any significant results you report were not found through p-hacking (running and then rerunning the analysis until you find a significant result).
Dwyer and colleagues preregistered the following hypothesis: “Participants who receive cash transfers will demonstrate better outcomes than those who do not receive cash transfers”, with “better outcomes” referring to improvements on measures of cognitive functioning and subjective well-being. (Participants’ “assets and spending” were only measured as a “supplemental outcome” for “exploratory analysis”.)
So what did the researchers find? When it came to their preregistered hypothesis, there was no evidence the cash transfer had any impact. This is shown in the chart below. Those who received the cash transfer did not score significantly better than the controls on any of the measures of cognitive functioning or subjective well-being. (The chart shows results at the one year follow-up. But the differences were also non-significant at the one month follow-up.)
Where the researchers did find significant differences were in number of days homeless and spending on food, rent and durable goods. Here, those who received the cash transfer fared better than the controls. And as you can see, there was no significant difference in spending on “temptation goods” (alcohol, drugs and cigarettes).
In summary, the preregistered hypothesis was not supported – though the cash transfer recipients did fare better with respect to spending and number of days homeless.
Lack of support for the preregistered hypothesis was reported as the study’s finding, right? Wrong. It wasn’t even mentioned in the abstract (as noted by Jon Baron, President of the Coalition for Evidence-Based Policy). Instead, the study’s findings were portrayed as “unambiguously positive”.
And even the more encouraging results are somewhat suspect. There was substantial attrition in both groups (meaning that some participants dropped out of the study after randomisation). So we can’t be sure that the differences in spending and number of days homeless were actually caused by the cash transfer – rather than by selective drop-out.
What’s more, the absence of a difference in spending on “temptation goods” may be partly attributable to the fact that homeless people with “severe” substance abuse problems were exempt from participation.
While Dwyer and colleagues’ study does offer preliminary evidence that unconditional cash transfers help homeless people to get back on their feet, the findings were presented in a rather misleading way. Just reading the abstract of a scientific paper can be a useful time-saver, but it’s always good to check the main results yourself.
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A very helpful example of pseudo science.
It’s the kind of garbage collectivists lap up while searching for policies to solve social problems. We’re all, not just the homeless, like little lab rats on which they can act upon to “make the world a better place”.
This is similar to the Universal Basic Income which is another fraud. Hand every person £1K per month on top of the welfare system which sets a minimum level of income. Ridiculous. If you are homeless you cannot be handed cash. You need to repair many other issues first. The Welfare state is broke and broken. Enough already.
UBI would actually be better than the current welfare system. No means test, no discrimination, no perverse incentives.
There are big differences in why people might be homeless (or appear to be). Complex mental or physical health issues make some people unsuitable to ‘normal living’. Given social housing or sheltered accommodation and these people will still find their way back on the streets. Similarly there are the drug addicts and alcoholics that exhibit severe anti-social behavioral traits that money alone wont fix. Then there are the ‘professional’ beggars, there are also those exploited by criminal gangs in what is known as modern slavery.
Only anecdotally, but in a country like the UK with it’s generous welfare system and councils having a statuary responsibility to house anyone – I cant think of any reason why a person could be on the streets for lack of money. The first time in my life I saw real, genuine hardship was on a stag-do in Eastern Europe and ironically also in the supposedly wealthy USA.
FYI, you can watch Eva Vlaardingerbroek’s new (35min) documentary about the sorts of people living on the streets across Germany here. You will not be in a rush to visit after watching this. She speaks German too, clever lass. I can’t see how major cities in the UK would differ much from this tbh. Worth watching.
https://twitter.com/EvaVlaar/status/1703157698219458989
The study may not have been perfect, but Occam’s Razor would say that giving them unconditional cash DOES make them better off on balance, at least at the margin. I know conservatives don’t like the idea of “something for nothing” (unless they themselves benefit directly from it, and not “those people”) and think that everything must have more strings attached than a spider’s web (often conflating the normative with the descriptive), but come on now. Behind such opposition, I detect “the bony, blue-fingered hand of Puritanism” that is causing such cognitive dissonance.
Well this conservative doesn’t like the idea of giving his money away. Occam’s razor would suggest to me that in the long run, giving people money without giving them other help does more harm than good.
1) No one in favor of it, including the authors, is saying they should be denied other help. That is a straw man, as we can walk and chew gum at the same time. 2) The money can simply be created, like all money is when you really look at it, so you don’t have to “give away” your own money if that bothers you. 3) And finally, as the late, great John Maynard Keynes famously said long ago, “in the long run, we are all dead”.
(Mic drop)
“2) The money can simply be created, like all money is when you really look at it, so you don’t have to “give away” your own money if that bothers you”
I don’t have the ability to create money, so giving mine away does bother me. Money can be created with a printing press, value can only be created through work.
This study has already been savaged in the Canadian and other media.
One was the pre-screening – everyone with addiction or mental issues were excluded. Only shorter-term homeless were excluded.
“age 19 to 65, homeless for less than 2 y (homelessness defined as the lack of stable housing), Canadian citizen or permanent resident, and nonsevere levels of substance use (DAST-10) (21), alcohol use (AUDIT) (22), and mental health symptoms Colorado Symptom Index (CSI) (23) based on predefined thresholds”.
There were many dropouts from the study etc.
“Of the 732 participants, 229 passed all criteria (31%). Due to loss of contact with 114 participants despite our repeated attempts to reach them, we successfully enrolled 115 participants in the study as the final sample (50 cash, 65 noncash0”
There were many problems with this study.