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Expenditure Response to Increases in In‐Kind Transfers: Evidence from the Supplemental Nutrition Assistance Program
Author(s) -
Beatty Timothy K.M.,
Tuttle Charlotte J.
Publication year - 2015
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aau097
Subject(s) - supplemental nutrition assistance program , cash , economics , cash transfers , public economics , food stamps , food insecurity , business , food security , finance , market economy , ecology , welfare , biology , agriculture
Economic theory predicts that households who receive less in Supplemental Nutrition Assistance Program benefits than they spend on food will treat SNAP benefits as if they were cash. However, empirical tests of these predictions draw different conclusions. In this study, we reexamine this question using recent increases in Supplemental Nutrition Assistance Program benefits, the largest of which was due to the American Recovery and Reinvestment Act of 2009. We find that increases in benefits cause households to increase their food budget share by more than would be predicted by theory. Results are robust to a host of specification tests.