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Expenditure response to increases in in-kind transfers: Evidence from the Supplemental Nutrition Assistance Program

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  • Beatty, Timothy K.M.
  • Tuttle, Charlotte

Abstract

Recent studies on food stamp participant households' marginal propensity to spend out of food stamps versus income have had contradictory results: experimental studies have found household behavior aligns with standard economic theory where households' marginal propensity to spend on food out of food stamps is equivalent to cash income; observational studies found that households have a larger marginal propensity to spend out of food stamps than cash income. In this study, we re-examine this question by estimating how an unprecedentedly large increase in food stamp benefits due to the implementation of the American Recovery and Reinvestment Act affects food-at-home expenditure. We find that the policy change caused households to increase food-at-home expenditure as well as increase households' share of total expenditure allocated toward food-at-home expenditure. We compare these results to a time period without a meaningful food stamp policy change and find our results are unique to the ARRA implementation time period.

Suggested Citation

  • Beatty, Timothy K.M. & Tuttle, Charlotte, 2012. "Expenditure response to increases in in-kind transfers: Evidence from the Supplemental Nutrition Assistance Program," 2012 AAEA/EAAE Food Environment Symposium 122873, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaeafe:122873
    DOI: 10.22004/ag.econ.122873
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    References listed on IDEAS

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