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

Hilary Hoynes and Diane Schanzenbach

No 13025, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: H31 I38 (search for similar items in EconPapers)
Date: 2007-04
New Economics Papers: this item is included in nep-agr and nep-pbe
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Citations: View citations in EconPapers (17)

Published as Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2009. "Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 109-39, October.

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Journal Article: Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program (2009)
Working Paper: Consumption Reponses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program (2007)
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