SNAP and Food Consumption

In this paper we describe the relationship between SNAP and food consumption. We first present the neoclassical framework for analyzing in-kind transfers, which unambiguously predicts that SNAP will increase food consumption, and then describe the SNAP benefit formula. We then present new evidence from the Consumer Expenditure Survey on food spending patterns among households overall, SNAP recipients, and other subgroups of interest. We find that a substantial fraction of SNAP-eligible households spend an amount that is above the program’s needs standard. We also show that the relationship between family size and food spending is steeper than the slope of the SNAP needs parameter, and that large families are more likely to spend less on food than the needs standard amount. By program design, actual benefit levels are smaller than the needs standards. We find that most families spend more on food than their predicted benefit allotment, and are therefore infra-marginal and are predicted to treat their benefits like cash according to the neoclassical model. This paper was prepared for the conference “Five Decades of Food Stamps” held at the Brookings Institution on September 20, 2013. The authors would like to thank Tom DeLeire, Jonathan Scwabish, and the editors for useful comments.