Do SNAP Recipients Get the Best Prices?

Abstract

This paper examines the relationship between SNAP participation and prices paid for food items. To test this relationship, we develop an expensiveness index following the method of Aguiar and Hurst (2007) and use the FoodAPS data set. Using both ordinary least squares (OLS) method and controlling for endogeneity using instrumental variable approaches, we did no find an effect of SNAP participation on prices paid for food items when we controlled for shopping behavior and habits and food market variables. Our results suggest that SNAP participants are not systematically disadvantaged in their food purchases. Additional efforts to further educate SNAP participants on saving, effective shopping and budgeting habits may help households pay comparatively lower food prices.

Keywords: SNAP, FoodAPS, food purchasing decisions, consumer behavior

JEL Classification: G18, Q18, I38, P36