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What Is the Impact of Food Stamps on Prices and Products Variety? The Importance of the Supply Response

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  • Xavier Jaravel

Abstract

Comparing US states that implemented policies generating state-specific variation in the take-up rate for food stamps, I find that food stamp eligible households experienced lower inflation and a faster increase in product variety in states with a larger increase in take-up (i.e., with increasing demand from the eligible population). Consistent with a causal interpretation, the effects are driven by food products with strong local brands and there is no comparable pattern for ineligible households across the income distribution. Thus, the long-run supply response to changes in demand from food stamp recipients has a first-order impact on the program's cost-benefit analysis.

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  • Xavier Jaravel, 2018. "What Is the Impact of Food Stamps on Prices and Products Variety? The Importance of the Supply Response," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 557-561, May.
    • Handle: RePEc:aea:apandp:v:108:y:2018:p:557-61
    Note: DOI: 10.1257/pandp.20181071
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    Cited by:

    1. Fernando Borraz & Felipe Carozzi & Nicolás González-Pampillón & Leandro Zipitría, 2021. "Local Retail Prices, Product Varieties and Neighborhood Change," Documentos de Trabajo (working papers) 0821, Department of Economics - dECON.
    2. Leung,Justin H. & Hee Kwon (Samuel) Seo, 2022. "How Do Government Transfer Payments Affect Retail Prices and Welfare ? Evidence from SNAP," Policy Research Working Paper Series 10075, The World Bank.
    3. Santiago Garriga & Dario Tortarolo, 2020. "Wage effects of employer-mediated transfers," Discussion Papers 2020-08, Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP).
    4. Leung, Justin H. & Seo, Hee Kwon, 2023. "How do government transfer payments affect retail prices and welfare? Evidence from SNAP," Journal of Public Economics, Elsevier, vol. 217(C).

    More about this item

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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