Association for Public Policy Analysis & Management

The Supplemental Nutrition Assistance Program (SNAP) provides funds, which can only be used to purchase food, to eligible low-income households. The United States Department of Agriculture estimates that the program costed $71 billion in 2016. Such a high cost burden is a controversy and leads to scrutiny in terms of the program’s effectiveness.

So far, we know that SNAP is quite effective at improving food security for low-income households. Program participants display an increase in their budget share spent on food items (Carlos, Boonsaeng, Chen, & Okrent, 2014), more specifically on food at home (Burney, 2015). These findings suggest that the program promotes food spending and provides an increase in caloric intake for people who would otherwise be under-consuming food.

A growing policy concern however is the healthfulness of foods purchased using SNAP Dollars. While the policy goal of the SNAP program is to smooth consumption of food for low-income groups, the health and diets of participants are arguably important outcomes. If the program provides food to participants, but the latter are only able to purchase nutritionally poor food, we are switching the problem from food insecurity to the proliferation of diet related diseases among people who most likely can afford medical care only through governmental assistance.

To help with growing economic concerns due to the Great Recession of 2007-2009, the United States Congress passed the American Recovery and Reinvestment Act (ARRA). Among other projects, the ARRA provided an average of 15% increase in SNAP benefit payouts to eligible participants. This paper thus aims to investigate the relationship between an increase in SNAP payouts through the ARRA and consumption choices of SNAP participants. Existing research shows that the program was effective at improving food security during this time of economic downturn (Beatty & Tuttle , 2014; Kumcu & Kaufman, 2011). The goal here is to identify whether SNAP participants decide to purchase healthier foods, such as fruits and vegetables, when they receive more benefits.

I use a difference-in-differences specification, defining different comparison groups to try to accurately capture the change in expenditure share spent on key food groups. The strongest effect detected is an increase in food budget share being spent on meats and a reduction of the food budget share spent on fruits and vegetables. I argue that the income effect associated with the ARRA increase in SNAP benefits might be too small to influence the purchase of fruits and vegetables. Thus, one can imply that if diet improvements are a policy goal of SNAP it might require tremendous financial investment in the program to provide an effect big enough to see dietary improvements. On the other hand, other mechanisms such as price discounts or cash value vouchers might be more effective at improving the healthfulness of low-income households’ diets.

Note: Reference list omitted to meet word limit. It is available upon request.