The Effects of Benefit Timing and Income Fungibility on Food Purchasing Decisions Among Supplemental Nutrition Assistance Program Households

17 Pages Posted: 15 Apr 2020

See all articles by Travis Smith

Travis Smith

University of Georgia

Joshua Berning

Colorado State University, Fort Collins - Colorado State University

Xiaosi Yang

University of Georgia

Gregory Colson

University of Georgia

Jeffrey Dorfman

University of Georgia

Date Written: March 2016

Abstract

The Supplemental Nutrition Assistance Program (SNAP) is the largest nutritional safety net in the United States. Prior research has found that participants have higher consumption shortly after receiving their benefits, followed by lower consumption towards the end of the benefit month. Known as the “SNAP benefit cycle,” this consumption pattern has been found to have negative effects on beneficiaries. We hypothesize two behavioral responses of SNAP participants may work in tandem to drive much of the cycle: (1) short‐run impatience—a higher preference to consume today, and (2) fungibility of income—the degree of substitutability between a SNAP dollar and a cash dollar. Using data from the National Food Acquisition and Purchase Survey (FoodAPS), a newly developed nationally representative survey of daily food acquisitions by SNAP households, we find evidence of both behavioral responses. However, the degree of short‐run impatience and fungibility of income is found to differ significantly across poverty levels and use of grocery lists to plan food purchases. SNAP households could gain from food purchase planning education.

Keywords: Fungibility of income, SNAP benefit cycle, timeā€inconsistent preferences

Suggested Citation

Smith, Travis and Berning, Joshua and Yang, Xiaosi and Colson, Gregory and Dorfman, Jeffrey, The Effects of Benefit Timing and Income Fungibility on Food Purchasing Decisions Among Supplemental Nutrition Assistance Program Households (March 2016). American Journal of Agricultural Economics, Vol. 98, Issue 2, pp. 564-580, 2016, Available at SSRN: https://ssrn.com/abstract=3575922 or http://dx.doi.org/10.1093/ajae/aav072

Travis Smith (Contact Author)

University of Georgia ( email )

Athens, GA 30602-7509
United States

Joshua Berning

Colorado State University, Fort Collins - Colorado State University

Department of Economics
Fort Collins, CO 80253-1771
United States

Xiaosi Yang

University of Georgia

Athens, GA 30602-6254
United States

Gregory Colson

University of Georgia

Athens, GA 30602-6254
United States

Jeffrey Dorfman

University of Georgia

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