Thrifty Food Plan Price Index, SNAP Purchasing Power, and Participation
50 Pages Posted: 23 Sep 2020 Last revised: 5 Jan 2022
Date Written: September 23, 2021
This paper estimates the state-level spatial and temporal differences in the SNAP purchasing power by constructing panel price indices for the Thrifty Food Plan (TFP). We construct the TFP index using retail scanner data for the period 2006–2016. We find that the range of SNAP purchasing power for a household of four is between 5 and 9 percent across the states and that the regional disparities are persistent during the study period. Subsequently, we examine the extent to which the SNAP purchasing power affects program participation. Our results show that a ten percent increase in the real SNAP benefits leads to a 0.9 percentage point increase in the SNAP caseload per capita and an 8.1 percentage point increase in the SNAP caseload per eligible individual. We show that these effects would be overlooked if the TFP index is not corrected for the expenditure and outlet bias.
Keywords: SNAP purchasing power, food and nutrition policy, index number, panel price indices, SNAP participation.
JEL Classification: Q18, I38, C43, E31.
Suggested Citation: Suggested Citation