In-kind benefits and household behavior: The impact of SNAP on food-away-from-home consumption

Abstract

Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, provides in-kind benefits that can generally be utilized for Food At Home (FAH) only. According to economic theory, SNAP benefits are fungible with cash for inframarginal households which may allow participants to spend benefits on non-FAH items. However, empirical evidence for this theory is mixed. This paper exploits an underutilized source of state-level variation, the early-2000 s recession, to determine the impact of SNAP participation on household Food Away From Home (FAFH) consumption. In a difference in difference framework, I compare households in high post-recession SNAP growth states to households in low post-recession SNAP growth states. The results show that SNAP participation causes a significant decrease in FAFH expenditure and FAFH’s share of total food expenditure.