Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program

57 Pages Posted: 14 Apr 2007 Last revised: 28 Apr 2015

See all articles by Hilary Williamson Hoynes

Hilary Williamson Hoynes

University of California, Berkeley; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Diane Whitmore Schanzenbach

Northwestern University - School of Education and Social Policy; NBER

Date Written: April 2007

Abstract

Economists have strong theoretical predictions about how in-kind transfer programs -- such as providing vouchers for food -- impact consumption. Despite the prominence of the theory, there has been little empirical work documenting actual responses to in-kind transfers. In this work, we leverage previously underutilized variation in the date of the county-level original implementation of the Food Stamp Program in the 1960s and early 1970s. Using the Panel Study of Income Dynamics, we employ difference-in-difference methods to estimate the impact of program availability on food spending, labor supply and family income. Consistent with theoretical predictions, we find that the introduction of food stamps leads to a decrease in out of pocket food spending, an increase in overall food expenditures, and a decrease (although insignificant) in the propensity to take meals out. The results are quite precisely estimated for total food spending, with less precision in estimating the impacts on out of pocket food costs. We find evidence of small work disincentive impacts in the PSID, which is confirmed with an analysis of the 1960, 1970 and 1980 Census.

Suggested Citation

Hoynes, Hilary Williamson and Schanzenbach, Diane Whitmore, Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program (April 2007). NBER Working Paper No. w13025, Available at SSRN: https://ssrn.com/abstract=979930

Hilary Williamson Hoynes (Contact Author)

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Diane Whitmore Schanzenbach

Northwestern University - School of Education and Social Policy ( email )

Evanston, IL
United States

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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