Interest rate cuts, grants and other financial incentives do not benefit everyone equally due to the mental work needed to take advantage, Liberum analysts have said.
Citing a study by Bank of Finland staff on how people with differing IQ levels reacted to changing incentives, Liberum noted the best and fairest schemes were those that involved little or no thought on the part of the consumer.
Using data from Finnish military conscription IQ tests and tax records, the study found people borrowing at times of low interest during the 2010s were disproportionately those with higher scores.
“It takes some thought to understand incentives and how to use them to your advantage,” the investment bank said.
A government scheme offering grants for households to buy newer, more efficient cars in 2015 was also studied, offering similar results.
“Who actually takes advantage of these ever-emerging incentives,” Liberum asked, “as it turns out, it’s people with higher IQs".
Adding that incentives do not benefit people equally, Liberum warned that many who were “unwilling or unable” to take advantage risked missing out.