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The Stimulus Act of 2009 and Its Effect on Food-At-Home Spending by SNAP Participants

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  • Tuttle, Charlotte

Abstract

The American Recovery and Reinvestment Act of 2009, commonly known as the Stimulus Act, increased maximum benefits for households that participate in the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program). In this analysis, SNAP households increased the food share of total expenditures by 1.44 percentage points after the increase in benefits and spent 53 cents of each additional dollar of SNAP benefits on food; this means that SNAP and cash income are not perfectly fungible. Neoclassical economic theory would predict a figure closer to 5-10 cents for each additional SNAP dollar. Thus, SNAP benefits provided a larger boost to food-expenditure share than an equal amount of cash. This report provides estimates of the marginal propensity to spend out of SNAP for vulnerable populations, including households at the lowest income level (under $15,000 annually), single-parent households, households with a member over age 65, and households with an unemployed member. In each subgroup but the elderly, households exhibited higher marginal propensities to spend on food out of SNAP than economic theory predicts, with the lowest income households demonstrating the highest marginal propensity to spend out of SNAP (0.62, or 62 cents for each additional dollar).

Suggested Citation

  • Tuttle, Charlotte, 2016. "The Stimulus Act of 2009 and Its Effect on Food-At-Home Spending by SNAP Participants," Economic Research Report 262193, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:262193
    DOI: 10.22004/ag.econ.262193
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    References listed on IDEAS

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    1. Timothy K.M. Beatty & Charlotte J. Tuttle, 2015. "Expenditure Response to Increases in In-Kind Transfers: Evidence from the Supplemental Nutrition Assistance Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(2), pages 390-404.
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    1. Vogel, Stephen & Miller, Cristina & Ralston, Katherine, 2021. "Impact of USDA's Supplemental Nutrition Assistance Program (SNAP) on Rural and Urban Economies in the Aftermath of the Great Recession," USDA Miscellaneous 314934, United States Department of Agriculture.
    2. Hudak, Katelin M. & Racine, Elizabeth F., 2021. "Do additional SNAP benefits matter for child weight?: Evidence from the 2009 benefit increase," Economics & Human Biology, Elsevier, vol. 41(C).
    3. Namrata Sanjeevi, 2021. "Impact of Supplemental Nutrition Assistance Program Benefit Reduction or Loss on Food-at-Home Acquisitions and Community Food Program Use," IJERPH, MDPI, vol. 18(22), pages 1-10, November.
    4. Yanliang Yang & George C Davis & Wen You, 2019. "Measuring Food Expenditure Poverty in SNAP Populations: Some Extensions with an Application to the American Recovery and Reinvestment Act," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(1), pages 133-152, March.
    5. Oliveira, Victor & Prell, Mark & Tiehen, Laura & Smallwood, David, 2018. "Design Issues in USDA’s Supplemental Nutrition Assistance Program: Looking Ahead by Looking Back," Economic Research Report 276253, United States Department of Agriculture, Economic Research Service.
    6. Valizadeh, Pourya & Smith, Travis A., 2017. "How Did the American Recovery and Reinvestment Act (ARRA) Impact the Material Well-being of SNAP Participants? A Distributional Approach," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258496, Agricultural and Applied Economics Association.

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