Explaining The Food Stamp Cash-Out Puzzle
AbstractEmpirical studies have shown that food stamp participants spend a higher proportion of their benefit on food than they would with an equivalent amount of cash. Our study demonstrates that this result can be explained by the decision-making behavior of multi-adult households. Multi-adult households spend a higher proportion of their food stamp benefit than they would with an equivalent amount of cash. In contrast, single-adult households show little difference in food spending between food stamps and an equivalent amount of cash. Because over 30 percent of food stamp participants are in multi-adult households, switching from food stamps to cash may reduce food purchases of these needy households. If that is indeed the case, the use of food stamps and other in-kind benefits may be more desirable than other forms of assistance.
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Bibliographic InfoPaper provided by United States Department of Agriculture, Economic Research Service in its series Food Assistance and Nutrition Research Reports with number 33869.
Date of creation: 2001
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Food Stamp Program; cash transfers; cash-out puzzle; welfare stigma; Cournot model; intra-household distribution; Engel curves; Food Consumption/Nutrition/Food Safety; Food Security and Poverty;
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