Assessing the Effectiveness of SNAP by Examining Extramarginal Participants

The original Food Stamp Act of 1964 stated that the purpose of the program was “…to safeguard the health and well-being of the Nation’s population and raise levels of nutrition among low-income households.” However, if recipients of in-kind transfers spend more on the good than the value of the in-kind transfer, i.e., they are inframarginal, standard economic theory implies that providing the bene. [...] Given the at least 10- fold difference in the estimate of the marginal propensity to consume food out of SNAP benefits between these two types of recipients, an accurate estimate of the proportion extramarginal is critical to assessing the extent to which SNAP increases food consumption. [...] As discussed below, we use these results to assess the amount of the bias in estimates of the proportion extramarginal due to underreporting of food stamp participation in the PSID.5 Second, the amount of SNAP benefits and food expenditures as reported by survey respondents are measured with error for a variety of reasons. [...] Demographic variables include age of the family head (continuous), race of the family head (black, white, other), whether the head of the family is female, the level of education of the family head (less than high school, high school, more than high school), the number of people in the family unit, and the head’s marital status (currently married vs. [...] The current estimates using the CEX Interview and Diary Surveys are based on comparing the reported amount of food stamp benefit in the last month of receipt to the reported amount of usual weekly spending on food at home adjusted to a monthly amount.