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The Impact of SNAP Vehicle Asset Limits on Household Asset Allocation

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  • Deokrye Baek
  • Christian Raschke

Abstract

Beginning in 2001, states were given the authority to formulate their own rules on how vehicles are counted toward the asset limit in the Supplemental Nutritional Assistance Program. We exploit differences in timing of the state vehicle asset policy changes to identify their effect on vehicle assets and debts, car ownership, liquid assets holdings, as well as non‐housing wealth. We estimate difference‐in‐differences and household fixed effects specifications and find that liberalizing vehicle asset rules increases vehicle assets of households with a high ex ante probability of program participation. Households also take on more debt to finance their vehicles. The increase in car value can be attributed primarily to less educated single parents who already owned a car before the policy change buying more expensive cars.

Suggested Citation

  • Deokrye Baek & Christian Raschke, 2016. "The Impact of SNAP Vehicle Asset Limits on Household Asset Allocation," Southern Economic Journal, John Wiley & Sons, vol. 83(1), pages 146-175, July.
    • Handle: RePEc:wly:soecon:v:83:y:2016:i:1:p:146-175
    DOI: 10.1002/soej.12135
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    2. Kuypers, Sarah & Marchal, Sarah & Verbist, Gerlinde & Marx, Ive, 2020. "Singling out the truly needy: the role of asset testing in European minimum income schemes," EUROMOD Working Papers EM4/20, EUROMOD at the Institute for Social and Economic Research.

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