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Title: How Are SNAP Benefits Spent? Evidence from a Retail Panel
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. (JEL D12, H75, I12, I18, I38)  more » « less
Award ID(s):
1658037
PAR ID:
10222806
Author(s) / Creator(s):
;
Date Published:
Journal Name:
American Economic Review
Volume:
108
Issue:
12
ISSN:
0002-8282
Page Range / eLocation ID:
3493 to 3540
Format(s):
Medium: X
Sponsoring Org:
National Science Foundation
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