IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

How Are SNAP Benefits Spent? Evidence from a Retail Panel

Listed author(s):
  • Justine S. Hastings
  • Jesse M. Shapiro

We use a novel retail panel with more than six years of detailed transaction records to study the effect of participation in the Supplemental Nutrition Assistance Program (SNAP) on household spending. We frame our approach using novel administrative data from the state of Rhode Island. 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 in the sense that benefits do not cover all food spending. We reject the hypothesis that households respect the fungibility of money in a semiparametric setup. A post-hoc model of mental accounting rationalizes these facts and others.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.nber.org/papers/w23112.pdf
Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 23112.

as
in new window

Length:
Date of creation: Jan 2017
Handle: RePEc:nbr:nberwo:23112
Note: PE
Contact details of provider: Postal:
National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.

Phone: 617-868-3900
Web page: http://www.nber.org
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Hilary W. Hoynes & Diane Schanzenbach, 2007. "Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program," NBER Working Papers 13025, National Bureau of Economic Research, Inc.
  2. repec:cbo:report:43173 is not listed on IDEAS
  3. Kumcu, Aylin & Kaufman, Phillip R., 2011. "Food Spending Adjustments During Recessionary Times," Amber Waves, United States Department of Agriculture, Economic Research Service, September.
  4. Battistin, Erich & Padula, Mario, 2010. "Survey Instruments and the Reports of Consumption Expenditures: Evidence from the Consumer Expenditure Surveys," CEPR Discussion Papers 8051, C.E.P.R. Discussion Papers.
  5. repec:pri:indrel:dsp01z603qx42c is not listed on IDEAS
  6. Steven T. Yen & Margaret Andrews & Zhuo Chen & David B. Eastwood, 2008. "Food Stamp Program Participation and Food Insecurity: An Instrumental Variables Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 117-132.
  7. Hal R. Varian, 1983. "Non-parametric Tests of Consumer Behaviour," Review of Economic Studies, Oxford University Press, vol. 50(1), pages 99-110.
  8. Jesse M. Shapiro, 2013. "Fungibility and Consumer Choice: Evidence from Commodity Price Shocks," The Quarterly Journal of Economics, Oxford University Press, vol. 128(4), pages 1449-1498.
  9. Pauline Leung & Christopher J. O'Leary, 2015. "Should UI Eligibility Be Expanded to Low-Earning Workers? Evidence on Employment, Transfer Receipt, and Income from Administrative Data," Upjohn Working Papers and Journal Articles 15-236, W.E. Upjohn Institute for Employment Research.
  10. Heath, Chip & Soll, Jack B, 1996. " Mental Budgeting and Consumer Decisions," Journal of Consumer Research, Oxford University Press, vol. 23(1), pages 40-52, June.
  11. Anonymous & Hamilton, William L. & Lin, Biing-Hwan, 2004. "Effects Of Food Assistance And Nutrition Programs On Nutrition And Health: Volume 3, Literature Review," Food Assistance and Nutrition Research Reports 33863, United States Department of Agriculture, Economic Research Service.
  12. Naomi E. Feldman, 2010. "Mental Accounting Effects of Income Tax Shifting," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 70-86, February.
  13. Lutz Kilian, 2010. "Explaining Fluctuations in Gasoline Prices: A Joint Model of the Global Crude Oil Market and the U.S. Retail Gasoline Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 87-112.
  14. Richard Blundell & Martin Browning & Ian Crawford, 1997. "Non-parametric Engel curves and revealed preferences," IFS Working Papers W97/14, Institute for Fiscal Studies.
  15. Wilde, Parke E., 2001. "The Food Stamp Benefit Formula: Implications For Empirical Research On Food Demand," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July.
  16. Mark Aguiar & Erik Hurst, 2005. "Consumption versus Expenditure," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 919-948, October.
  17. repec:aea:aecrev:v:106:y:2016:i:12:p:3932-61 is not listed on IDEAS
  18. Farhi, Emmanuel & Gabaix, Xavier, 2015. "Optimal Taxation with Behavioral Agents," CEPR Discussion Papers 11008, C.E.P.R. Discussion Papers.
  19. Diane Whitmore, 2002. "What Are Food Stamps Worth?," Working Papers 847, Princeton University, Department of Economics, Industrial Relations Section..
  20. Aviv Nevo & Arlene Wong, 2015. "The Elasticity of Substitution Between Time and Market Goods: Evidence from the Great Recession," NBER Working Papers 21318, National Bureau of Economic Research, Inc.
  21. Banks, James & Blundell, Richard & Tanner, Sarah, 1998. "Is There a Retirement-Savings Puzzle?," American Economic Review, American Economic Association, vol. 88(4), pages 769-788, September.
  22. Thompson, Samuel B., 2011. "Simple formulas for standard errors that cluster by both firm and time," Journal of Financial Economics, Elsevier, vol. 99(1), pages 1-10, January.
  23. Bart J. Bronnenberg & Jean-Pierre Dubé & Matthew Gentzkow & Jesse M. Shapiro, 2014. "Do Pharmacists Buy Bayer? Informed Shoppers and the Brand Premium," NBER Working Papers 20295, National Bureau of Economic Research, Inc.
  24. Moffitt, Robert, 1989. "Estimating the Value of an In-Kind Transfer: The Case of Food Stamps," Econometrica, Econometric Society, vol. 57(2), pages 385-409, March.
  25. Martin Browning & Thomas Crossley & Joachim Winter, 2014. "The measurement of household consumption expenditures," IFS Working Papers W14/07, Institute for Fiscal Studies.
  26. repec:mpr:mprres:6601 is not listed on IDEAS
  27. Milkman, Katherine L. & Beshears, John, 2009. "Mental accounting and small windfalls: Evidence from an online grocer," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 384-394, August.
  28. 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, May 30-31, Boston, MA 122873, Agricultural and Applied Economics Association.
  29. Wilde, Parke E. & Troy, Lisa M. & Rogers, Beatrice L., 2009. "AJAE Appendix for “Food Stamps and Food Spending: an Engel Function Approachâ€," American Journal of Agricultural Economics Appendices, Agricultural and Applied Economics Association, vol. 91(2), May.
  30. repec:fth:prinin:468 is not listed on IDEAS
  31. Caroline Ratcliffe & Signe-Mary McKernan & Sisi Zhang, 2011. "How Much Does the Supplemental Nutrition Assistance Program Reduce Food Insecurity?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(4), pages 1082-1098.
  32. Congressional Budget Office, 2012. "The Supplemental Nutrition Assistance Program," Reports 43173, Congressional Budget Office.
  33. Wilde, Parke E. & Ranney, Christine K., 1996. "The Distinct Impact Of Food Stamps On Food Spending," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(01), July.
  34. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-954, July.
  35. Fox, Mary Kay & Hamilton, William L. & Lin, Biing-Hwan, 2004. "Effects Of Food Assistance And Nutrition Programs On Nutrition And Health: Volume 4, Executive Summary Of The Literature Review," Food Assistance and Nutrition Research Reports 33871, United States Department of Agriculture, Economic Research Service.
  36. Peter Kooreman, 2000. "The Labeling Effect of a Child Benefit System," American Economic Review, American Economic Association, vol. 90(3), pages 571-583, June.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:23112. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.