Heterogeneous Impact of Supplemental Nutrition Assistance Program Benefit Changes on Food Security by Local Prices

Abstract

The Supplemental Nutrition Assistance Program benefit amount is fixed across all 48 states (except Hawaii and Alaska), although food prices vary widely. Hence, the real value of Supplemental Nutrition Assistance Program benefits can directly affect the purchasing power of Supplemental Nutrition Assistance Program participants and subsequently their food insecurity. Using the 2 most recent changes to the Supplemental Nutrition Assistance Program benefit formula in 2009 and 2013, this study examines whether the changes in benefit level affected food security of participants differentially depending on local food prices. Data from the Current Population Survey-Food Security Supplement 2008-2009 and 2012-2013, merged with the Regional Price Parities from the Bureau of Economic Analysis, were used. Linear regression with a differences-in-differences strategy estimated the effects of Supplemental Nutrition Assistance Program benefit changes on the food security of Supplemental Nutrition Assistance Program households, separately by those in high- and low-cost areas. The analyses were completed in 2019. After the benefit increase, the prevalence of low food security among Supplemental Nutrition Assistance Program households living in high-cost areas declined by 11.2 percentage points (95% CI=1.6, 20.8). Following the benefit decrease, the prevalence of very low food security among Supplemental Nutrition Assistance Program households increased by 8.7 percentage points (95% CI=3.6, 13.8) in high-cost areas. In contrast, there was no statistically significant difference between Supplemental Nutrition Assistance Program and non-Supplemental Nutrition Assistance Program households in low-cost areas in response to the benefit changes. Given the heterogeneous effects of the Supplemental Nutrition Assistance Program benefit changes on food security by local food prices, this study provides additional evidence for the ongoing policy debate regarding whether the Supplemental Nutrition Assistance Program benefit amounts should be adjusted to the cost of living.