UBC Study: What Happens When You Give Homeless People $7,500?

There is a stark contrast between public perception and reality in how homeless people spend their money, says a researcher who gave 50 homeless people in British Columbia $7,500 each to could do with it what they wanted.

Instead of spending this windfall on “temptation goods”, such as alcohol, drugs or cigarettes, they spent it on rent, clothes and food, according to the study conducted by Jiaying Zhao, a researcher at the ‘University of British Columbia.

The aid even generated a net saving of nearly $800 per beneficiary, taking into account the costs that would have been involved in providing shelter accommodation.

“The goal is to do something about the homelessness crisis here in Canada, and specifically in Vancouver, because current approaches are failing,” said Zhao, who works with policymakers on the issue. “I think this study provides very strong evidence in favor of a basic income policy. »

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Researchers tracked recipient spending for a year after receiving the money. They also followed a control group of 65 homeless people who did not receive help.

The study, recently published in the Proceedings of the National Academy of Sciences, found that recipients spent 99 fewer days homeless and 55 more days in stable housing. They also retained an additional $1,160 in savings.

Zhao, an a*sociate professor of psychology at UBC, said in an interview Wednesday that researchers “uncovered a range of surprising positive benefits from a cash transfer.”

Spending on “temptation goods” was not different between recipients and control group. However, the study did not include people with severe substance or alcohol use or mental health symptoms. Other criteria required participants to have been homeless for less than two years.

Participants were recruited from 22 homeless shelters in the Lower Mainland of British Columbia.

The study says that by reducing the time spent in shelters, the money transfer was “cost effective”.

It says the societal cost of staying in a shelter in Vancouver was about $93 per night, and that the reduced number of nights in shelters resulted in “societal cost savings” of $8,277 per beneficiary.

This represented a net saving of $777 over the cost of the document.

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“Alternatively, beds freed up in shelters can be reallocated, so that the benefits can trickle down to helping others avoid sleeping rough,” the study notes.

Zhao said the study was funded by a federal government grant and by private donors and foundations she declined to identify.

The researchers also conducted an online survey of approximately 1,100 US residents to understand public perceptions of homelessness spending.

Vancouverites weren’t recruited because the researchers were looking for a “representative voice” in North America, and Zhao said “Vancouverians are more progressive than the average North American.”

Respondents predict that recipients of a $7,500 unconditional cash transfer would spend 81 percent more on goods like alcohol, drugs and tobacco if they were homeless than if they were housed.

Zhao said most also expected homeless people to spend $300 a month on such goods, while the study found that these people only spent about $100 a month on such goods.

“It’s an unfortunate and pervasive belief held by many people, which is why we really wanted to examine this bias,” she said.

Zhao said his team discovered that public perception can be challenged through effective messaging and policy change.

“I work with politicians and policymakers in Canada on bills like this,” she said, referring to Bill S-233, currently before the Senate and aimed at creating a national framework. for a guaranteed basic income to cover essential living expenses. for persons in Canada over the age of 17.

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She added that the researchers are now replicating the study in a larger sample of people and expanding it to other cities in Canada and the United States.

This report from The Canadian Press was first published on September 1, 2023.

&copy 2023 The Canadian Press

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