Abstract
We use a novel retail panel with more than six years of detailed transaction records to study the effect of participation in the Supplemental Nutrition Assistance Program (SNAP) on household spending. We frame our approach using novel administrative data from the state of Rhode Island. 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 in the sense that benefits do not cover all food spending. We reject the hypothesis that households respect the fungibility of money in a semiparametric setup. A post-hoc model of mental accounting rationalizes these facts and others.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
