Estimating the Effect of Supplemental Nutrition Assistance Program Participation on Food Spending Cycles
Friday, November 13, 2015
Riverfront South/Central (Hyatt Regency Miami)
*Names in bold indicate Presenter
The Supplemental Nutrition Assistance Program (SNAP) aims to improve food security and nutrition of low-income households through conditional cash transfers. Observed intra-monthly spending behavior shows increased spending following SNAP disbursement and a subsequent decline throughout the month, increasing risk of food insecurity. This study advances the literature by identifying the causal effect of SNAP participation on weekly spending behavior. Exploiting frequent exit and reentry in SNAP, I use Former SNAP households as a control group to evaluate whether the observed behavior is a result of SNAP design or characteristics of low-income households. Two distinct data sources are used, the Consumer Expenditure Survey and Grocery Scanner data, overcoming questions of benefit timing, changes in household dynamics, and self-reported behaviors. Log-linear models are used to evaluate intra-monthly spending, controlling for observable household characteristics and household fixed effects. Effects of income frequency and participation in other assistance programs are also assessed. Findings suggest myopic spending trends among SNAP households are caused by the benefit disbursement design. Receiving a lump-sum, targeted transfer once per month causes an income-effect. Spreading the SNAP benefit to multiple payments per month may help households smooth spending, improving food security among this vulnerable population.