How Are SNAP Benefits Spent? Evidence from a Retail Panel / Justine S. Hastings, Jesse M. Shapiro.

Format:

Book

Author/Creator:

Hastings, Justine S.

Contributor:

National Bureau of Economic Research.

Shapiro, Jesse M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w23112.

NBER working paper series no. w23112

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

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.

Notes:

Print version record

January 2017.