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United States Food Assistance Programs: New Evidence for Program Impact Recipient Behavior

Paper Session

Saturday, Jan. 7, 2017 3:15 PM – 5:15 PM

Swissotel Chicago, St Gallen 2
Hosted By: Agricultural and Applied Economics Association
  • Chair: Timothy Beatty, University of California-Davis

Reconsidering the SNAP Benefit Formula

Craig Gundersen
,
University of Illinois-Urbana-Champaign
Brent Kreider
,
Iowa State University
John V. Pepper
,
University of Virginia

Abstract

Food insecurity, “…the uncertainty of having, or unable to acquire, enough food due to insufficient money or other resources” has become a leading indicator of economic well-being in the United States for two central reasons. First, the extent of the problem is staggering – almost 50 million Americans lived in food insecure households in 2014. Second, there is a well-established set of negative health outcomes associated with food insecurity which lead to dramatically higher health care costs. To reduce food insecurity, the U.S. Department of Agriculture (USDA) administers a number of food assistance programs. Research has convincingly demonstrated that these programs, especially the Supplemental Nutrition Assistance Program (SNAP) reduces food insecurity but millions of SNAP recipients are still food insecure. One approach to moving food insecure SNAP recipients to food secure status is to have an across-the-board increase in SNAP benefits. A less expensive and perhaps more politically feasible alternative is to consider changes to the benefit formula that would increase benefits to SNAP recipients most likely to be food insecure. We do so, first, by identifying combinations of the observed characteristics of SNAP food insecure recipients with data from the 2014 December Supplement of the Current Population Survey (CPS). After identifying these household characteristics, we, second, ascertain the appropriate increase in benefits to enable food insecure SNAP households to be food secure. We use information from the following question on the CPS asked of those who indicated that they are not obtaining enough food to meet the needs of their family: “About how much more would you need to spend each week to buy just enough food to meet the needs of your household?” For a variety of reasons, including potential moral hazard, responses to this question alone cannot be used to establish changes in SNAP benefit levels.

Do SNAP Households Pay Different Prices Throughout the Benefit Month?

Travis A. Smith
,
University of Georgia
Pourya Valizadeh
,
University of Georgia
Michele Ver Ploeg
,
USDA Economic Research Service

Abstract

The Supplemental Nutritional Assistance Program (SNAP), the nation’s largest food assistance program, provided low-income households with nearly $70 billion in benefits in 2014 (Colman-Jensen et al., 2015). SNAP has a clearly defined dual mandate to alleviate food insecurity and to allow households to obtain a more nutritious diet. SNAP aims to accomplish these goals by “increasing the food purchasing power for all eligible households” through in-kind benefit transfers (Food, Conservation, and Energy Act of 2008). The extent to which households leverage this increase in purchasing power is the objective of this research. The focus is on differences in prices paid when using SNAP benefits versus non-SNAP income. Standard economic theory states that the type of income used (i.e., SNAP versus non-SNAP) should not impact purchases at the checkout counter. Yet empirical evidence has refuted this prediction by showing that households tend to spend more money when using SNAP dollars. That is, recipients do not equate the marginal value of a SNAP dollar to a cash dollar. We will present evidence that households pay decreasing prices throughout the benefit month and estimate the implied changes in welfare induced by such differences in prices.

WIC Recipient Behavior in the Transition to the Electronic Benefit Transfer System

Andrew S. Hanks
,
Ohio State University
Carolyn Gunther
,
Ohio State University
Robert Scharff
,
Ohio State University

Abstract

The Healthy, Hunger-Free Kids Act of 2010 requires that, by October 1, 2020, all states must distribute benefits using Electronic Benefits Transfer (EBT) for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). The new EBT system is designed to reduce the transaction costs associated with purchasing WIC eligible foods though the reduction might be offset by a direct monetary cost to beneficiaries. In this research we test the impact that the transition to EBT has had on consumer shopping behavior for WIC recipients in Ohio. Using a 75 week sample of transaction data for 73,313 WIC households that use loyalty cards at a large grocer in Ohio, we test the impact that the EBT system has on purchase behavior of WIC households using panel regression methods and difference in difference models. The rollout of the EBT system occurred in several stages across Ohio counties, allowing us to approach this as a natural experiment. Our results indicate that WIC shoppers spend more per week, on average, with the new EBT system. This increase in expenditures is solely on foods that are not WIC eligible, suggesting that the new system may have led to more purchase mistakes that are not acted on. Purchases of WIC eligible items do not change and there is no change in the frequency of visiting the store for WIC shoppers. Though the transition to EBT has reduced some transaction costs associated with purchasing WIC items, it appears to have created new costs for WIC beneficiaries. This has important welfare implications since these households are already identified as income constrained, and are offered WIC to ensure that financial challenges do not obstruct their access to nutritious foods.

Analyzing the Sustainability of the Impact of New USDA School Meal Guidelines on Fruit and Vegetable Selection and Consumption in School Cafeterias

Gnel Gabrielyan
,
Cornell University
Andrew S. Hanks
,
Ohio State University
Adam Brumberg
,
Cornell University
Brian Wansink
,
Cornell University

Abstract

United States Department of Agriculture (USDA) provides nutritional, free or reduced price meals to over 30 million children through it National School Lunch Program (NSLP). This makes USDA an important player in feeding the kids in the US. With the rise of obesity and the new emphasis put on the consumption of fruits and vegetables USDA’s role is more important than ever. USDA updated school lunch guidelines in 2012 due to the criticism towards the nutritional content of its reimbursable meals. The new standards required that students take either a fruit or a vegetable to qualify as a reimbursable meal. New guidelines, however, did not guarantee a sustainable selection and consumption of fruits and vegetables. This study examines the sustainability power of these regulations on fruit and vegetable selection and consumption over time. 11 schools were initially recruited in 2012 to participate in a study to check the impact of a new USDA policy on the consumption of fruits and vegetables in school cafeterias. The schools were randomly chosen to implement new preparation and serving requirements based on USDA’s new regulations. To check the sustainability of the program, researchers revisited the same set of schools in 2015. Thus, the analysis are based on the data from three periods; pre- and post-2012 and 2015. These findings shed light on the effectiveness and sustainability of NSLP guideline changes. They also provide detailed information on changes of fruit and vegetable selection, as well as, consumption at school cafeterias across different grade levels over three year period.
JEL Classifications
  • Q0 - General