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Explaining The Food Stamp Cash-Out Puzzle

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  • Breunig, Robert
  • Dasgupta, Indraneel
  • Gundersen, Craig
  • Pattanaik, Prasanta

Abstract

Empirical 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.

Suggested Citation

  • Breunig, Robert & Dasgupta, Indraneel & Gundersen, Craig & Pattanaik, Prasanta, 2001. "Explaining The Food Stamp Cash-Out Puzzle," Food Assistance and Nutrition Research Reports 33869, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersfa:33869
    DOI: 10.22004/ag.econ.33869
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    References listed on IDEAS

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    Cited by:

    1. Zagorsky, Jay L. & Smith, Patricia K., 2009. "Does the U.S. Food Stamp Program contribute to adult weight gain?," Economics & Human Biology, Elsevier, vol. 7(2), pages 246-258, July.
    2. Sujata Balasubramanian, 2015. "Is the PDS Already a Cash Transfer? Rethinking India's Food Subsidy Policies," Journal of Development Studies, Taylor & Francis Journals, vol. 51(6), pages 642-659, June.
    3. Jolliffe, Dean & Gundersen, Craig & Tiehen, Laura & Winicki, Joshua, 2003. "Food Stamp Benefits And Childhood Poverty In The 1990s," Food Assistance and Nutrition Research Reports 262267, United States Department of Agriculture, Economic Research Service.
    4. Stewart, Hayden & Blisard, Noel & Jolliffe, Dean, 2003. "Do Income Constraints Inhibit Spending on Fruits and Vegetables Among Low-Income Households?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(3), pages 1-16, December.
    5. Sujata Balasubramanian, 2015. "Is the PDS Already a Cash Transfer? Rethinking India's Food Subsidy Policies," HKUST IEMS Working Paper Series 2015-16, HKUST Institute for Emerging Market Studies, revised Mar 2015.
    6. Mykerezi, Elton & Mills, Bradford F., 2009. "On Intra-Annual Poverty in the U.S.: Prevalence, Causes and Response to Food Stamp Program Use," Staff Papers 49095, University of Minnesota, Department of Applied Economics.
    7. Indraneel Dasgupta & Ravi Kanbur, 2011. "Does philanthropy reduce inequality?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(1), pages 1-21, March.
    8. Nordström, Jonas & Thunström, Linda, 2009. "The impact of tax reforms designed to encourage healthier grain consumption," Journal of Health Economics, Elsevier, vol. 28(3), pages 622-634, May.
    9. Stewart, Hayden & Blisard, Noel, 2006. "The Thrifty Food Plan and low-income households in the United States: What food groups are being neglected?," Food Policy, Elsevier, vol. 31(5), pages 469-482, October.
    10. Atasoy, Sibel & Mills, Bradford F. & Mykerezi, Elton, 2008. "Intensity of Food Stamp Use and Transient and Chronic Poverty: Evidence from the Panel Study of Income Dynamics," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6541, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Blisard, Noel & Stewart, Hayden, 2006. "How Low-Income Households Allocate Their Food Budget Relative to the Cost of the Thrifty Food Plan," Economic Research Report 7239, United States Department of Agriculture, Economic Research Service.
    12. Jolliffe, Dean & Tiehen, Laura & Gundersen, Craig & Winicki, Joshua, 2003. "FOOD STAMP BENEFITS AND CHILD POVERTY IN THE 1990s," Food Assistance and Nutrition Research Reports 33833, United States Department of Agriculture, Economic Research Service.
    13. Margaret Grosh & Carlo del Ninno & Emil Tesliuc & Azedine Ouerghi, 2008. "For Protection and Promotion : The Design and Implementation of Effective Safety Nets," World Bank Publications - Books, The World Bank Group, number 6582, December.
    14. Colleen M. Heflin & James P. Ziliak, 2008. "Food Insufficiency, Food Stamp Participation, and Mental Health," Social Science Quarterly, Southwestern Social Science Association, vol. 89(3), pages 706-727, September.
    15. World Bank Group, 2016. "Cash Transfers in Humanitarian Contexts," World Bank Publications - Reports 24699, The World Bank Group.
    16. Gentilini, Ugo, 2014. "Our daily bread : what is the evidence on comparing cash versus food transfers?," Social Protection Discussion Papers and Notes 89502, The World Bank.

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