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Food Prices and the Timing of Welfare Payments: A Canadian Study

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  • Georges Tanguay
  • Gary Hunt
  • Nicolas Marceau

Abstract

This is a study of the relationship between the timing of social welfare payments and the price of food for one neighbourhood in Montreal. Using prices of 31 grocery products over 26 weeks and across seven stores, we obtain two main results. First, we show that the availability of social welfare resources affects grocery prices throughout the month. Second, average grocery prices are lowest during cheque-receipt week and rise by 6.8 percent to 11.72 percent over the remainder of the monthly social welfare cycle. We argue that these results are consistent with social welfare recipients having progressively less resources for transportation over a month and therefore are more reliant on local grocery stores.

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Bibliographic Info

Article provided by University of Toronto Press in its journal Canadian Public Policy.

Volume (Year): 31 (2005)
Issue (Month): 2 (June)
Pages: 145-160

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Handle: RePEc:cpp:issued:v:31:y:2005:i:2:p:145-160

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  1. MacDonald, James M, 2000. "Demand, Information, and Competition: Why Do Food Prices Fall at Seasonal Demand Peaks?," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 48(1), pages 27-45, March.
  2. Edward L. Glaeser, 1996. "Should Transfer Payments Be Indexed to Local Price Levels?," NBER Working Papers 5598, National Bureau of Economic Research, Inc.
  3. Barton L. Lipman, 1993. "Information Processing and Bounded Rationality: A Survey," Working Papers, Queen's University, Department of Economics 872, Queen's University, Department of Economics.
  4. Alcaly, Roger E & Klevorick, Alvin K, 1971. "Food Prices in Relation to Income Levels in New York City," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 44(4), pages 380-97, October.
  5. Glazer, Amihai, 1981. "Advertising, Information, and Prices-A Case Study," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 19(4), pages 661-71, October.
  6. Tanguay, Georges & Vallee, Luc & Lanoie, Paul, 1995. "Shopping Hours and Price Levels in the Retailing Industry: A Theoretical and Empirical Analysis," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 33(3), pages 516-24, July.
  7. Parke E. Wilde & Christine K. Ranney, 2000. "The Monthly Food Stamp Cycle: Shooping Frequency and Food Intake Decisions in an Endogenous Switching Regression Framework," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 82(1), pages 200-213.
  8. MacDonald, James M. & Nelson, Paul Jr., 1991. "Do the poor still pay more? Food price variations in large metropolitan areas," Journal of Urban Economics, Elsevier, vol. 30(3), pages 344-359, November.
  9. Tanguay, Georges & Hunt, Gary & Marceau, Nicolas, 2002. "Using a Canadian-American Natural Experiment to Study Relative Efficiencies of Social Welfare Payment Systems," Cahiers de recherche, CIRPEE 0205, CIRPEE.
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