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Price Consciousness at the Peak of “Impatience”

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  • Mary Zaki
  • Jessica E. Todd

Abstract

Past studies consistently document that consumption among low-income households spikes after income receipt and then subsequently declines. Using two approaches to analyze linked survey and administrative data on food purchases, we find that SNAP recipients are most price-conscious and engage in their most successful price-saving efforts soon after benefit receipt. This contrasts with prior literature that posits recipients mistakenly feel “flush” with money after benefit receipt and injects forethought and savviness among SNAP recipients into the prevailing narrative that they lack self-control and capability. The frequency of benefit receipt may act as a savings commitment device that funds price-saving efforts.

Suggested Citation

  • Mary Zaki & Jessica E. Todd, 2023. "Price Consciousness at the Peak of “Impatience”," Journal of Human Resources, University of Wisconsin Press, vol. 58(3), pages 1003-1027.
    • Handle: RePEc:uwp:jhriss:v:58:y:2023:i:3:p:1003-1027
    Note: DOI: https://doi.org/10.3368/jhr.59.1.0121-11411
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    File URL: http://jhr.uwpress.org/cgi/reprint/58/3/1003
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    References listed on IDEAS

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    1. Zaki, Mary, 2016. "Access to Short-term Credit and Consumption Smoothing within the Paycycle," ET: Economic Theory 232213, Fondazione Eni Enrico Mattei (FEEM).
    2. Lorenzo Casaburi & Rocco Macchiavello, 2019. "Demand and Supply of Infrequent Payments as a Commitment Device: Evidence from Kenya," American Economic Review, American Economic Association, vol. 109(2), pages 523-555, February.
    3. Mary Zaki, 2016. "Access to Short-term Credit and Consumption Smoothing within the Paycycle," Working Papers 2016.07, Fondazione Eni Enrico Mattei.
    4. Jillian B. Carr & Analisa Packham, 2019. "SNAP Benefits and Crime: Evidence from Changing Disbursement Schedules," The Review of Economics and Statistics, MIT Press, vol. 101(2), pages 310-325, May.
    5. Shapiro, Jesse M., 2005. "Is there a daily discount rate? Evidence from the food stamp nutrition cycle," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 303-325, February.
    6. Melvin Stephens Jr., 2003. ""3rd of tha Month": Do Social Security Recipients Smooth Consumption Between Checks?," American Economic Review, American Economic Association, vol. 93(1), pages 406-422, March.
    7. Timothy K.M. Beatty, 2010. "Do the Poor Pay More for Food?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(3), pages 608-621.
    8. Travis A. Smith & Joshua P. Berning & Xiaosi Yang & Gregory Colson & Jeffrey H. Dorfman, 2016. "The Effects of Benefit Timing and Income Fungibility on Food Purchasing Decisions among Supplemental Nutrition Assistance Program Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(2), pages 564-580.
    9. Zaki, Mary, 2016. "Access to Short-term Credit and Consumption Smoothing within the Paycycle," ETA: Economic Theory and Applications 232213, Fondazione Eni Enrico Mattei (FEEM).
    10. Jacob Goldin & Tatiana Homonoff & Katherine Meckel, 2022. "Issuance and Incidence: SNAP Benefit Cycles and Grocery Prices," American Economic Journal: Economic Policy, American Economic Association, vol. 14(1), pages 152-178, February.
    11. Jessica E. Todd, 2015. "Revisiting the Supplemental Nutrition Assistance Program cycle of food intake: Investigating heterogeneity, diet quality, and a large boost in benefit amounts," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 37(3), pages 437-458.
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    Cited by:

    1. J. Michael Collins & Amrita Kulka, 2023. "Saving by buying ahead: stockpiling in response to lump‐sum payments," Fiscal Studies, John Wiley & Sons, vol. 44(4), pages 451-484, December.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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