Food demand and cash transfers: A collective household approach with Homescan data

I study how individual preferences and bargaining power within older couples affects the impact of cash transfers on food demand. Using longitudinal Homescan data, I find that wives have stronger preferences for food than husbands, and that household demand patterns for food are affected by spouse’s relative bargaining power. Failure to account for these effects leads to underestimates of older couples’ total food demand, and of their implied response (at both intensive and extensive margins) to a counterfactual experiment of a cash transfer program with equivalent benefit size as the Supplemental Nutrition Assistance Program (SNAP). I find that the cash transfer can achieve the goals of SNAP to some extent.