What Is the Impact of Food Stamps on Prices and Products Variety? The Importance of the Supply Response

Xavier Jaravel

AEA Papers and Proceedings, 2018, vol. 108, 557-61

Abstract: Comparing US states that implemented policies generating state-specific variation in the take-up rate for food stamps, I find that food stamp eligible households experienced lower inflation and a faster increase in product variety in states with a larger increase in take-up (i.e., with increasing demand from the eligible population). Consistent with a causal interpretation, the effects are driven by food products with strong local brands and there is no comparable pattern for ineligible households across the income distribution. Thus, the long-run supply response to changes in demand from food stamp recipients has a first-order impact on the program's cost-benefit analysis.

JEL-codes: H75 I18 I38 L11 L66 Q11 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/pandp.20181071
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