SNAP Eligible Products and Behavioral Demand

• Agricultural Economics Workshop
• Departmental Seminar

Date and Location

Tuesday, January 31, 2023, 10:30 AM - 12:00 PM
ARE Library Conference Room, 4101 Social Sciences and Humanities

Abstract

This paper estimates the effects of Supplemental Nutrition Assistance Program (SNAP) benefits on demand, with a focus on how SNAP changes behavior in ways not rationalized by a standard model. We use this environment to study a counterfactual policy of making sugar-sweetened beverages like soda ineligible for purchase with SNAP. We identify how SNAP eligibility contributes to differences in the marginal propensity to consume, utilizing policy variation in product eligibility. Reduced form findings suggest an 11 to 23 percent decline in the quantity of soda purchased if soda were made SNAP ineligible. We then estimate a structural behavioral model that rationalizes observed spending patterns. Our model predicts soda purchases would decline by 22 percent if soda were made ineligible for purchase with SNAP benefits. At the same time, juice purchases are predicted to increase by 15 percent, and total sugars from beverage purchases decrease by 6 percent.