Economists have strong theoretical predictions about how in-kind
transfers, such as providing vouchers for food, impact consumption.
Despite the prominence of the theory, there is little empirical work
on responses to in-kind transfers, and most existing work fails to
support the canonical theoretical model. We employ difference-indifference
methods to estimate the impact of program introduction
on food spending. Consistent with predictions, we find that food
stamps reduce out-of-pocket food spending and increase overall
food expenditures. We also find that households are inframarginal
and respond similarly to one dollar in cash income and one dollar
in food stamps. (JEL D12, H23, I38)
Hoynes, Hilary W., and Diane Whitmore Schanzenbach.
"Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program."
American Economic Journal: Applied Economics,
Consumer Economics: Empirical Analysis
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Welfare and Poverty: Government Programs; Provision and Effects of Welfare Programs