Impact of the SNAP Program on Food Consumption

George Emmanuel Kalamotousakis
EC344 Semester Project
Professor Rodrigo Schneider
George Emmanuel Kalamotousakis
16-04-2019
IMPACT OF THE SNAP PROGRAM ON FOOD CONSUMPTION
Statement of Responsibility:
“I have not witnessed any wrongdoing, nor have I personally violated any conditions of the
Skidmore Honor Code while taking this examination.”
Signature:
George Emmanuel Kalamotousakis
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George Emmanuel Kalamotousakis
Executive Summary
Hunger, food insecurity and malnutrition are major public health challenges affecting
many low-income Americans. The Supplemental Nutrition Assistance Program (SNAP) serves
as the US agency to assist low-income sections of the US population towards improving food
security and improving nutrition. SNAP has grown rapidly over the past few years, with the
number of participants increasing by roughly 300% between 2000 to 2015. The dramatic
increase has led to a series of studies being conducted to investigate its impact on recipients’
food consumption habits.
Various researchers have proved that SNAP is highly effective at alleviating food
insecurity and improving nutrition. “SNAP has improved food security and reduced poverty for
millions of Americans” (U.S. Department of Agriculture, 2015). SNAP has helped “an average
of 45.8 million individuals per month in the year 2015” (U.S. Department of Agriculture, 2015).
The program has been found to have far-reaching short-term and long-term benefits on
participants from low-income households. A recent study suggests that “The ARRA (American
Recovery and Reinvestment Act of 2009) led to roughly a 12 percent increase in benefits for the
typical SNAP recipient and lifted roughly 8 percent, or 530,000 households, out of food
insecurity” (U.S. Departmentt of Agriculture, 2019). Food assistance to the low-income earners
“leads to a reduction in hunger rates and improvements in health and academic performance
among beneficiary children” (U.S. Department of Agriculture, 2019).
The primary aim of the current study was to investigate the impact of receiving SNAP
benefits on weekly household food expenditures. The study used the difference in differences
technique where subjects were studied for the differential impacts of SNAP program benefits on
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George Emmanuel Kalamotousakis
food expenditure. The study examined the impact of SNAP benefits on food expenditures from
2000-2018, using an interaction variable that compares expenditures before 2009 with
expenditures from 2009 to 2018 (after an expansion of SNAP benefits took place). Regression
analysis (using OLS regression) was conducted for purposes of analyzing the data. The study
made use of nutrition survey data available at https://cps.ipums.org/cps/index.shtml.
A key finding of the study is that participation in the SNAP program impacts household
expenditures allocated to food. In general, respondents who received SNAP benefits spent about
$10 less per week on food than households that did not receive SNAP benefits. However,
household food expenditures were about $1.50 higher among respondents who received SNAP
benefits from 2009-2018. This appears to show that people who participate in the SNAP program
end up increasing resource allocation to food expenditure during the time period studied.
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George Emmanuel Kalamotousakis
Table of Contents
Executive Summary 1
Contents 2
Introduction 3
SNAP 4
Eligibility 4
Research Objective 4
Research questions 5
Limitations 5
Methodology 5
Regression Discontinuity Design 5
Assumptions of DID 6
Instruments 7
Data 7
Hypotheses 8
Null Hypothesis 1 8
Alternative Hypothesis 8
Results and Discussion 9
Results 9
Regression Discontinuity 9
Discussion 11
Conclusion 11
References 12
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George Emmanuel Kalamotousakis
Introduction
The primary objectives of the United States Department of Agriculture (USDA) are
improvement of food security, reduction of hunger through enabling more access to food,
promoting consumption of healthy diets, and conducting nutrition education among low-income
Americans (Ratcliffe, McKernan, & Zhang, 2011). To realize the department’s objective, some
of the programs designed by USDA include the “Supplemental Nutrition Assistance Program
(SNAP), Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and
the National School Lunch and School Breakfast (School Meals) Programs” (Fraker and
Devaney, 2013).
SNAP is the largest program that assists people and families in the United States who are
suffering from hunger issues. “It offers nutrition assistance to millions of eligible, low-income
individuals and families” who are in need of it and “provides economic benefits to communities”
(U.S. Department of Agriculture, 2015). It has “helped more than 40 million Americans” (Center
on Budget and Policy Priorities, 2018). SNAP is very well known for the Food Stamp Program
as well. SNAP is funded by the federal government and the different states who use it. The total
cost of SNAP sums up to approximately $70 billion USD per fiscal year (Nord & Prell, 2011).
After the 2009 expansion that occurred “food expenditures increased by 5.4% and food
insecurity declined by 2.2%” (Nord & Prell, 2011).
SNAP benefits can be enjoyed by almost all households with low incomes. Who receives
SNAP benefits is determined by the government and the eligibility criteria are the same across
the nation, although some states can alter specific rules of the program. An example is that in
some states have different qualifications of who can get SNAP depending on the “value of a
vehicle or a household they might own.” In most cases in order to be able to get SNAP one must
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be making under 1,287 dollars per year. There are also specific “categories of people who are not
eligible for SNAP regardless of how small their income or assets may be” (U.S. Department of
Agriculture, 2015). These categories of people include “strikers, college students, legal
immigrants and illegal immigrants also are not eligible for SNAP” (U.S. Department of
Agriculture, 2015).
According to the Center on Budget and Policy Priorities an “average SNAP recipient
receives $126 a month which equals $4.20 a day or $1.40 per meal” (Center on Budget and
Policy Priorities, 2018). Depending on the specific income of a household SNAP benefits
received are a bit different and offer a more suitable food program which is more appropriate to
it. This means that in some cases poorer households enjoy more benefits than wealthier
households (Center on Budget and Policy Priorities, 2018).
Today, the SNAP program is implemented through issuance of monthly benefits to
beneficiaries in the form of Electronic Benefit Transfer (EBT) which are used when making
purchases at selected stores (Carlson et al., 2017). In 2013 there was an estimated $275 per
benefits for each household per month, that is $133 per person (Schmier, 2015). However, the
program’s implementation and benefits have changed very little over time with just the same
framework adopted approximately 50 years ago being adopted in the program today (Kim,
2015). The foods included in the SNAP program include breads and cereals, fruits and
vegetables, meats, fish and poultry, dairy products, seeds and plants that produce food for
household consumption.
Many people across the country believe that SNAP has had positive effects, including
decreasing the hunger rate in the United States (Center on Budget and Policy Priorities, 2018).
SNAP had more than 42 million participants in the fiscal year 2017 which amounts to 13% of the
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