Hand to Mouth: Financial Stress and Food Insecurity

54 Pages Posted: 8 Mar 2020 Last revised: 20 Apr 2020

See all articles by Alexander W. Butler

Alexander W. Butler

Rice University - Jesse H. Jones Graduate School of Business

Irem Demirci

Nova School of Business and Economics

Umit Gurun

University of Texas at Dallas

Yessenia Tellez

Rice University - Jesse H. Jones Graduate School of Business

Date Written: February 11, 2020

Abstract

We link consumer credit bureau data to data on household demographics and consumption choices. We show that financial stress changes consumers’ consumption patterns. Not only does financial stress change how and where consumers shop, but it also affects the types and quality of food they buy. Consumers exhibit a dramatic shift toward purchasing cheap, high-calorie foods during times of high financial distress, which we interpret as a manifestation of food insecurity. Families with children are especially sensitive and respond more sharply to financial stress. Our results offer policy implications for targeted interventions.

Keywords: Financial Stress, Consumption, Personal Finance, Food Insecurity

JEL Classification: D1, L81, I1, I31

Suggested Citation

Butler, Alexander W. and Demirci, Irem and Gurun, Umit and Tellez, Yessenia, Hand to Mouth: Financial Stress and Food Insecurity (February 11, 2020). Available at SSRN: https://ssrn.com/abstract=3530165 or http://dx.doi.org/10.2139/ssrn.3530165

Alexander W. Butler

Rice University - Jesse H. Jones Graduate School of Business ( email )

MS 531
Houston, TX 77005
United States
713-348-6341 (Phone)

HOME PAGE: http://www.owlnet.rice.edu/~awbutler/

Irem Demirci

Nova School of Business and Economics ( email )

Lisbon
Portugal

Umit Gurun (Contact Author)

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

HOME PAGE: http://www.umitgurun.com

Yessenia Tellez

Rice University - Jesse H. Jones Graduate School of Business ( email )

6100 South Main Street
MS-531
Houston, TX 77005-1892
United States

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