What Is the Impact of Food Stamps on Prices and Products Variety? The Importance of the Supply Response
AEA Papers and Proceedings
vol. 108,
May 2018
(pp. 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.Citation
Jaravel, Xavier. 2018. "What Is the Impact of Food Stamps on Prices and Products Variety? The Importance of the Supply Response." AEA Papers and Proceedings, 108: 557-61. DOI: 10.1257/pandp.20181071Additional Materials
JEL Classification
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- I18 Health: Government Policy; Regulation; Public Health
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L66 Food; Beverages; Cosmetics; Tobacco; Wine and Spirits
- Q11 Agriculture: Aggregate Supply and Demand Analysis; Prices