Full Citation

Title: The Effect of Electronic Benefit Transfer on the Marginal Propensity to Consume Food out of SNAP

Citation Type: Miscellaneous

Publication Year: 2018

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: The Supplemental Nutrition Assistance Program (SNAP) provides food assistance to nearly 44 million Americans each year. Empirical estimates of the program’s ability to stimulate food consumption vary widely. Studies of SNAP recipients from the 1960s-1980s find much smaller marginal propensities to consume food (MPCf) out of SNAP than studies using samples of recipients from the late-2000s and 2010s. I provide some of the first evidence on the cause of this increase by investigating whether this difference can be explained by the shift from paper coupons (“food stamps”) to Electronic Benefit Transfer (EBT) cards. I use a linear fixed effects model to exploit plausibly exogenous variation in the introduction of EBT across states and time to identify the effect of EBT introduction on the MPCf out of SNAP. I find that EBT introduction can partially explain the increase in the MPCf out of SNAP between earlier and later studies. Additionally, the transition to EBT caused an economically significant increase in food expenditures by SNAP households. This work documents a significant, though unintended, increase in the ability of SNAP to stimulate food consumption. It has significant implications for estimating the impact of SNAP benefits today as well as understanding the effects of changing how transfer payments are made.

Url: https://econ.arizona.edu/sites/default/files/wp2018-11_the_effect_of_electronic_benefit_transfer.pdf

User Submitted?: No

Authors: Eck, Chase S

Publisher: University of Arizona

Data Collections: IPUMS CPS

Topics: Other, Poverty and Welfare

Countries: