Families who receive benefits from the Supplemental Nutrition Assistance Program (formerly known as food stamps) use fewer discount coupons and allot more money for spending on food than they would without assistance, according to a forthcoming study by Justine Hastings and Jesse Shapiro, professors of economics.
Why would they go through the time and trouble of couponing and shopping for the best deals when they are playing with "house money".
Hastings and Shapiro found that “every $100 in SNAP benefits leads to between $50 and $60 extra dollars of food spending each month,” Hastings wrote in an email to the Brown University Daily Herald.
According to the study, cash benefits of the same amount don't predict the same effect, Hastings added. Furthermore, the study found that SNAP beneficiaries are slightly less likely to buy less-expensive store brands and redeem discount coupons on SNAP-eligible food products.
Understanding if “SNAP has larger effects on food spending than cash benefits would is important for understanding its effects on the economy and on the lives of recipients,” she wrote.
According to Shapiro, the authors’ ability to more accurately calculate estimates for the effect of SNAP on food spending sets this research apart from similar studies. Hastings and Shapiro analyzed over six billion data points, including POS scanner data, in their study.
Scanner data is composed of any data collected when an individual checks out at a grocery store — including payment method and loyalty program history — and can be analyzed to compare the behaviors of SNAP recipients with other shoppers.
A key concept that the study explores is "mental accounting" a term devised by University of Chicago economics professor and Nobel Laureate Richard Thaler to describe a consumer's tendency
to budget specific amounts of money for various categories of spending.
Italicized text indicates our editorial comments.
Why would they go through the time and trouble of couponing and shopping for the best deals when they are playing with "house money".
Hastings and Shapiro found that “every $100 in SNAP benefits leads to between $50 and $60 extra dollars of food spending each month,” Hastings wrote in an email to the Brown University Daily Herald.
According to the study, cash benefits of the same amount don't predict the same effect, Hastings added. Furthermore, the study found that SNAP beneficiaries are slightly less likely to buy less-expensive store brands and redeem discount coupons on SNAP-eligible food products.
Understanding if “SNAP has larger effects on food spending than cash benefits would is important for understanding its effects on the economy and on the lives of recipients,” she wrote.
According to Shapiro, the authors’ ability to more accurately calculate estimates for the effect of SNAP on food spending sets this research apart from similar studies. Hastings and Shapiro analyzed over six billion data points, including POS scanner data, in their study.
Scanner data is composed of any data collected when an individual checks out at a grocery store — including payment method and loyalty program history — and can be analyzed to compare the behaviors of SNAP recipients with other shoppers.
A key concept that the study explores is "mental accounting" a term devised by University of Chicago economics professor and Nobel Laureate Richard Thaler to describe a consumer's tendency
to budget specific amounts of money for various categories of spending.
Italicized text indicates our editorial comments.