IDEAS home Printed from https://ideas.repec.org/a/wly/apecpp/v43y2021i3p1051-1075.html
   My bibliography  Save this article

Do SNAP Households Pay Different Prices throughout the Benefit Month?

Author

Listed:
  • Pourya Valizadeh
  • Travis A. Smith
  • Michele Ver Ploeg

Abstract

For households participating in the Supplemental Nutrition Assistance Program (SNAP), food expenditures spike upon benefit arrival. We show the price component of expenditure is sensitive to benefit arrival: by the beginning of the fourth week of the benefit month, households pay 20% less on food items. This decline is not induced by changes in shopping behaviors (usage of SNAP, bulk purchases, on‐sale, branded, and discount stores) but rather concentrated among a subset of households with financial constraints and/or a preference for higher‐quality foods. Increased benefit adequacy and/or financial stability for participants could help households smooth their purchasing power.

Suggested Citation

  • Pourya Valizadeh & Travis A. Smith & Michele Ver Ploeg, 2021. "Do SNAP Households Pay Different Prices throughout the Benefit Month?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(3), pages 1051-1075, September.
    • Handle: RePEc:wly:apecpp:v:43:y:2021:i:3:p:1051-1075
    DOI: 10.1002/aepp.13094
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/aepp.13094
    Download Restriction: no
    File URL: https://libkey.io/10.1002/aepp.13094?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. repec:mpr:mprres:6936 is not listed on IDEAS
    3. Todd, Jessica E. & Gregory, Christian, 2018. "Changes in Supplemental Nutrition Assistance Program real benefits and daily caloric intake among adults," Food Policy, Elsevier, vol. 79(C), pages 111-120.
    4. Christian A. Gregory & Travis A. Smith, 2019. "Salience, Food Security, and SNAP Receipt," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 38(1), pages 124-154, January.
    5. Jerry A. Hausman, 1996. "Valuation of New Goods under Perfect and Imperfect Competition," NBER Chapters, in: The Economics of New Goods, pages 207-248, National Bureau of Economic Research, Inc.
    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. McKelvey, Christopher, 2011. "Price, unit value, and quality demanded," Journal of Development Economics, Elsevier, vol. 95(2), pages 157-169, July.
    8. Kuhn, Michael A., 2018. "Who feels the calorie crunch and when? The impact of school meals on cyclical food insecurity," Journal of Public Economics, Elsevier, vol. 166(C), pages 27-38.
    9. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    10. Harding, Matthew & Lovenheim, Michael, 2017. "The effect of prices on nutrition: Comparing the impact of product- and nutrient-specific taxes," Journal of Health Economics, Elsevier, vol. 53(C), pages 53-71.
    11. Craig Gundersen & Brent Kreider, 2008. "Food Stamps and Food Insecurity: What Can Be Learned in the Presence of Nonclassical Measurement Error?," Journal of Human Resources, University of Wisconsin Press, vol. 43(2), pages 352-382.
    12. Clay, Marie & Ver Ploeg, Michele & Coleman-Jensen, Alisha & Elitzak, Howard & Gregory, Christian & Levin, David & Newman, Constance & Rabbitt, Mathew, 2016. "Comparing National Household Food Acquisition and Purchase Survey (FoodAPS) Data With Other National Food Surveys’ Data," Economic Information Bulletin 242451, United States Department of Agriculture, Economic Research Service.
    13. Mancino, Lisa & Todd, Jessica E. & Scharadin, Benjamin, 2018. "USDA’s National Household Food Acquisition and Purchase Survey: Methodology for Imputing Missing Quantities To Calculate Healthy Eating Index-2010 Scores and Sort Foods Into ERS Food Groups," Technical Bulletins 276252, United States Department of Agriculture, Economic Research Service.
    14. Timothy K. M. Beatty & Marianne P. Bitler & Xinzhe Huang Cheng & Cynthia van der Werf, 2019. "SNAP and Paycheck Cycles," Southern Economic Journal, John Wiley & Sons, vol. 86(1), pages 18-48, July.
    15. Parke E. Wilde & Christine K. Ranney, 2000. "The Monthly Food Stamp Cycle: Shooping Frequency and Food Intake Decisions in an Endogenous Switching Regression Framework," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 200-213.
    16. Chen Zhen & Eric A. Finkelstein & James M. Nonnemaker & Shawn A. Karns & Jessica E. Todd, 2014. "Predicting the Effects of Sugar-Sweetened Beverage Taxes on Food and Beverage Demand in a Large Demand System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 1-25.
    17. 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.
    18. 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.
    19. Justine Hastings & Ebonya Washington, 2010. "The First of the Month Effect: Consumer Behavior and Store Responses," American Economic Journal: Economic Policy, American Economic Association, vol. 2(2), pages 142-162, May.
    20. Deaton, Angus, 1988. "Quality, Quantity, and Spatial Variation of Price," American Economic Review, American Economic Association, vol. 78(3), pages 418-430, June.
    21. 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.
    22. 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.
    23. Beatty, Timothy K.M., 2016. "Food Price Variation over the SNAP Benefit Cycle," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236012, Agricultural and Applied Economics Association.
    24. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2015. "Household Surveys in Crisis," Journal of Economic Perspectives, American Economic Association, vol. 29(4), pages 199-226, Fall.
    25. Rachel Griffith & Ephraim Leibtag & Andrew Leicester & Aviv Nevo, 2009. "Consumer Shopping Behavior: How Much Do Consumers Save?," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 99-120, Spring.
    26. March, Raymond J. & Carpio, Carlos E. & Boonsaeng, Tullaya & Lyford, Conrad P., 2020. "Do SNAP Recipients Get the Best Prices?," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 52(1), pages 135-159, February.
    27. Timothy F. Bresnahan & Robert J. Gordon, 1996. "The Economics of New Goods," NBER Books, National Bureau of Economic Research, Inc, number bres96-1.
    28. 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.
    29. Muellbauer, John, 1974. "Household Production Theory, Quality, and the "Hedonic Technique."," American Economic Review, American Economic Association, vol. 64(6), pages 977-994, December.
    30. Karen S Hamrick & Margaret Andrews, 2016. "SNAP Participants’ Eating Patterns over the Benefit Month: A Time Use Perspective," PLOS ONE, Public Library of Science, vol. 11(7), pages 1-18, July.
    31. Leibtag, Ephraim S. & Kaufman, Phillip R., 2003. "Exploring Food Purchase Behavior of Low-Income Households: How Do They Economize?," Agricultural Information Bulletins 33711, United States Department of Agriculture, Economic Research Service.
    32. Imai, Kosuke & Yamamoto, Teppei, 2013. "Identification and Sensitivity Analysis for Multiple Causal Mechanisms: Revisiting Evidence from Framing Experiments," Political Analysis, Cambridge University Press, vol. 21(2), pages 141-171, April.
    33. J. William Levedahl, 1995. "A Theoretical and Empirical Evaluation of the Functional Forms Used to Estimate the Food Expenditure Equation of Food Stamp Recipients," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 960-968.
    34. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    35. Stephens Melvin, 2006. "Paycheque Receipt and the Timing of Consumption," Economic Journal, Royal Economic Society, vol. 116(513), pages 680-701, July.
    36. repec:mpr:mprres:6935 is not listed on IDEAS
    37. Kaufman, Phillip R. & MacDonald, James M. & Lutz, Steve M. & Smallwood, David M., 1997. "Do the Poor Pay More for Food? Item Selection and Price Differences Affect Low-Income Household Food Costs," Agricultural Economic Reports 34065, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dahan, Momi & Sayag, Doron, 2024. "Scarcity and consumption priorities," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).
    2. Cotti, Chad D. & Gordanier, John M. & Ozturk, Orgul D., 2021. "Does distributing SNAP benefits later in the month smooth expenditures?," Food Policy, Elsevier, vol. 104(C).
    3. Kuhn, Michael A., 2018. "Who feels the calorie crunch and when? The impact of school meals on cyclical food insecurity," Journal of Public Economics, Elsevier, vol. 166(C), pages 27-38.
    4. Lee, Ji Yong & Nayga Jr, Rodolfo M. & Jo, Young & Restrepo, Brandon J., 2022. "Time use and eating patterns of SNAP participants over the benefit month," Food Policy, Elsevier, vol. 106(C).
    5. Todd, Jessica E. & Gregory, Christian, 2018. "Changes in Supplemental Nutrition Assistance Program real benefits and daily caloric intake among adults," Food Policy, Elsevier, vol. 79(C), pages 111-120.
    6. Timothy K. M. Beatty & Marianne P. Bitler & Xinzhe Huang Cheng & Cynthia van der Werf, 2019. "SNAP and Paycheck Cycles," Southern Economic Journal, John Wiley & Sons, vol. 86(1), pages 18-48, July.
    7. Marianne P. Bitler & Christian Gregory, 2019. "Food Access, Program Participation, and Health: Research Using FoodAPS," Southern Economic Journal, John Wiley & Sons, vol. 86(1), pages 9-17, July.
    8. Marks, Mindy & Prina, Silvia & Gernhardt, Roy, 2023. "Government Shutdown and SNAP Disbursements: Effects on Household Expenditures," IZA Discussion Papers 16452, Institute of Labor Economics (IZA).
    9. Jeffrey H Dorfman & Christian Gregory & Zhongyuan Liu & Ran Huo, 2019. "Re-Examining the SNAP Benefit Cycle Allowing for Heterogeneity," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 41(3), pages 404-433.
    10. Gassman-Pines, Anna & Bellows, Laura & Copeland, William E. & Hoyle, Rick H. & Odgers, Candice L., 2023. "Day-to-day variation in adolescent food insecurity," Children and Youth Services Review, Elsevier, vol. 149(C).
    11. Michael A. Kuhn, 2021. "Electronic Benefit Transfer and Food Expenditure Cycles," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(3), pages 744-773, June.
    12. 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.
    13. Biondi, Beatrice & Cornelsen, Laura & Mazzocchi, Mario & Smith, Richard, 2020. "Between preferences and references: Asymmetric price elasticities and the simulation of fiscal policies," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 108-128.
    14. Damon, Amy L. & King, Robert P. & Leibtag, Ephraim, 2013. "First of the month effect: Does it apply across food retail channels?," Food Policy, Elsevier, vol. 41(C), pages 18-27.
    15. Beatty, Timothy K.M., 2016. "Food Price Variation over the SNAP Benefit Cycle," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236012, Agricultural and Applied Economics Association.
    16. Agustina Laurito & Amy Ellen Schwartz, 2019. "Does School Lunch Fill the “SNAP Gap” at the End of the Month?," Southern Economic Journal, John Wiley & Sons, vol. 86(1), pages 49-82, July.
    17. Marks, Mindy & Prina, Silvia & Tahaj, Redina, 2023. "Short-Term Labor Supply Response to the Timing of Transfer Payments: Evidence from the SNAP Program," IZA Discussion Papers 16299, Institute of Labor Economics (IZA).
    18. Jillian B. Carr & Analisa Packham, 2021. "SNAP Schedules and Domestic Violence," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(2), pages 412-452, March.
    19. Anne T. Byrne & David R. Just, 2021. "The Other Half: An Examination of Monthly Food Pantry Cycles in the Context of SNAP Benefits," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 716-731, June.
    20. Tal Gross & Timothy J. Layton & Daniel Prinz, 2022. "The Liquidity Sensitivity of Healthcare Consumption: Evidence from Social Security Payments," American Economic Review: Insights, American Economic Association, vol. 4(2), pages 175-190, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:apecpp:v:43:y:2021:i:3:p:1051-1075. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2040-5804 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.