Abstract
Previous research has established that benefit labels influence spending decisions, leading recipients toward spending in labeled categories even when benefits are fungible. In this project, I study whether labels similarly affect individuals' decisions to apply for benefits, proposing that mental accounting---allocating money to specific categories and failing to reallocate---shapes these decisions.
I will conduct an experiment with individuals who are potentially eligible for benefits. Participants provide information about their financial situation and indicate expense categories in which they face financial strain. Then, they see information about a benefit program and are asked if they are interested in learning more about the program and how to apply. I randomize the program suggestion: the program label matches the category of financial strain ("match"), the program does not match the category of financial strain ("mismatch"), or the program does not have a label that is linked to a category ("generic"). I will test whether alignment of program label and financial strain affects interest in the program. I additionally elicit participants' beliefs about the program (e.g., eligibility, perceived helpfulness etc.).