B.C. Study Distributes $7,500 to 50 Homeless Individuals: Here’s How They Spent It

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A recent study led by Dr. Jiaying Zhao, an associate professor of psychology at the University of British Columbia (UBC), challenges prevailing misconceptions about how homeless people manage money. The study provided 50 homeless individuals in Vancouver with a cash transfer of $7,500 and monitored their spending behaviour over a year.

Zhao and her team initiated the study in response to a survey that suggested people believed homeless individuals would squander four times more money on “temptation goods” like alcohol and drugs compared to those who are not homeless. “People in general don’t trust those in homelessness. We think that when we give homeless people money they’re going to squander it on drugs and alcohol. That’s a deeply ingrained distrust and I think it’s unfair and it’s not true,” Zhao told CTV News.

Study Findings Upend Preconceived Notions

According to the research outcomes, these apprehensions are unwarranted. “When we talk to these people, they know exactly what they need to do to get back to housing and they just don’t have the money,” said Zhao. “They did not spend more money on alcohol or drugs, contrary to what people believe, and instead they spent the money on rent, food, housing, transit, furniture, a used car, clothes. It’s entirely the opposite of what people think they’re going to do with the money.”

The study compared these participants with a control group of 65 homeless individuals who did not receive the cash. Those who received the cash transfer spent fewer days homeless, increased their savings, and utilized shelters less frequently, thereby “saving society” $777 per person, UBC stated in a news release.

Limitations and Future Directions

Zhao was candid about the limitations of her study, particularly its focus on a subset of the homeless population that does not include those with severe addictions or mental health issues. “Homeless people are not that different from us. Something terrible happened and they had nothing to fall back on,” she said, emphasizing that the study should be considered a starting point for further investigation.

The absence of data concerning the “hardest to house” segment of the homeless population was acknowledged by Zhao as a drawback. “We don’t know, there’s no evidence, and this is something to consider,” she noted.

Changing Public Perception

Zhao believes that the findings could be a game-changer in public perception and policy, facilitating a more empathetic view towards the homeless. “The cash transfer is such a no-brainer. But nobody is willing to try it,” Zhao stated, adding, “We spend billions in a year to manage homelessness and that investment is not getting good returns, because the homelessness crisis is only growing.”

The team plans to conduct similar studies in other Canadian and U.S. cities to further validate these initial findings and potentially inspire a paradigm shift in how society addresses homelessness.