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How Are SNAP Benefits Spent? Evidence from a Retail Panel

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  • Justine S. Hastings
  • Jesse M. Shapiro

Abstract

We use a novel retail panel with detailed transaction records to study the effect of the Supplemental Nutrition Assistance Program (SNAP) on household spending. We use administrative data to motivate three approaches to causal inference. The marginal propensity to consume SNAP-eligible food (MPCF) out of SNAP benefits is 0.5 to 0.6. The MPCF out of cash is much smaller. These patterns obtain even for households for whom SNAP benefits are economically equivalent to cash because their benefits are below their food spending. Using a semiparametric framework, we reject the hypothesis that households respect the fungibility of money. A model with mental accounting can match the facts.

Suggested Citation

  • Justine S. Hastings & Jesse M. Shapiro, 2017. "How Are SNAP Benefits Spent? Evidence from a Retail Panel," NBER Working Papers 23112, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23112
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    Cited by:

    1. Colin Gray, 2018. "Why Leave Benefits on the Table? Evidence from SNAP," Upjohn Working Papers and Journal Articles 18-288, W.E. Upjohn Institute for Employment Research.
    2. Jones, Jordan W. & Courtemanche, Charles & Marton, James, 2018. "The Impacts of the Food Stamp Program on Mortality," 2018 Annual Meeting, August 5-7, Washington, D.C. 273845, Agricultural and Applied Economics Association.
    3. Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2018. "Safety Net Investments in Children," NBER Working Papers 24594, National Bureau of Economic Research, Inc.
    4. repec:eee:jfpoli:v:75:y:2018:i:c:p:134-146 is not listed on IDEAS

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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