How Are SNAP Benefits Spent? Evidence from a Retail Panel

By Justine S. Hastings, Jesse M. Shapiro. The American Economic Review, 2018

238 citations recorded by the source corpus.

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. (JEL D12, H75, I12, I18, I38)

Subfields: Accounting, Economics and Econometrics, Gender Studies

View Paper: https://www.semanticscholar.org/paper/a34020f47d48304f3297e61468594b30c767d89d

Citations in the corpus

• Optimal Taxation with Behavioral Agents (2020, unknown): “Here, we choose the “ex post” allocation of attention to the tax m (τ), where system 1 (in Kahneman (2011)’s terminology—roughly, intuition) chooses attention given τ before system 2 (roughly, analytic thinking) chooses consumption given τ = mτ .”
• Pre-Event Trends in the Panel Event-Study Design (2019, unknown): “Section 4 presents applications of our proposed approach to the effect of SNAP on household spending (Hastings and Shapiro 2018), the effect of newspaper entry on voter turnout (Gentzkow et al.”