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An experiment on cash and in-kind transfers with application to food assistance programs

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  • Lusk, Jayson L.
  • Weaver, Amanda

Abstract

The impact of providing food assistance in kind (via food, stamps, or restricted debit cards) vs. cash has long been a subject of debate. Prior efforts to causally identify the effects of the two types of transfers have been hindered by concerns over non-random selection into assistance programs, misreporting of program benefits, and identification of inframarginal households who, theoretically, should treat cash and in-kind transfers identically. This paper reports the results of an economic experiment designed to cleanly test some conceptual issues associated with in-kind vs. cash giving in a lunchroom meal setting. Given current debates about the healthiness of food assistance recipients’ diets, we also consider the impacts of placing restrictions on in-kind transfers that either prohibit soda purchases with the transfer or require the transfer be spent on fruits and vegetables. Overall, we find that, as theory predicts, in-kind transfers have the same effect on food expenditures as an unrestricted cash transfer for inframarginal consumers, and for extramarginal consumers, food expenditures are higher for in-kind than cash transfers. Participants also respond to the fruit and vegetable restriction as theory would predict. However, in contrast to the theoretical prediction, the soda restriction reduces soda expenditures for more than half the inframarginal consumers.

Suggested Citation

  • Lusk, Jayson L. & Weaver, Amanda, 2017. "An experiment on cash and in-kind transfers with application to food assistance programs," Food Policy, Elsevier, vol. 68(C), pages 186-192.
  • Handle: RePEc:eee:jfpoli:v:68:y:2017:i:c:p:186-192
    DOI: 10.1016/j.foodpol.2017.02.005
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    Citations

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    Cited by:

    1. Leschewski, Andrea M. & Weatherspoon, Dave D., 2018. "The Supplemental Nutrition Assistance Program: Current Restricted Expenditures," 2018 Annual Meeting, August 5-7, Washington, D.C. 273846, Agricultural and Applied Economics Association.
    2. Leschewski, Andrea M. & Weatherspoon, Dave D., 2017. "SNAP Household Food Expenditures Using Non-SNAP Payment Methods," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259139, Agricultural and Applied Economics Association.
    3. repec:eee:jfpoli:v:75:y:2018:i:c:p:134-146 is not listed on IDEAS
    4. repec:oup:apecpp:v:39:y:2017:i:3:p:387-406. is not listed on IDEAS

    More about this item

    Keywords

    Experiment; Food assistance; Food stamps; SNAP; Southworth Hypothesis; Sugar sweetened beverages;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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