How Are SNAP Benefits Spent? Evidence from a Retail Panel
Hastings first author. Using a retail panel with detailed transaction records, the marginal propensity to consume food eligible for food assistance out of those benefits was 0.5 to 0.6, much smaller out of cash. The pattern held even for households whose benefits fell below their food spending, for whom the benefit is economically equivalent to cash. The authors reject the hypothesis that households respect the fungibility of money, and report that a mental accounting model matches the facts.
Hastings first author. Using a retail panel with detailed transaction records, the marginal propensity to consume food eligible for food assistance out of those benefits was 0.5 to 0.6, much smaller out of cash. The pattern held even for households whose benefits fell below their food spending, for whom the benefit is economically equivalent to cash. The authors reject the hypothesis that households respect the fungibility of money, and report that a mental accounting model matches the facts.
Written from the abstract read 2026-10-18.
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Hastings, J., & Shapiro, J. M. (2018). How Are SNAP Benefits Spent? Evidence from a Retail Panel. American Economic Review, 108(12), 3493-3540. doi:10.1257/aer.20170866.