In-Kind Benefits and Behavioral Demand

77 Pages Posted: 1 Aug 2022 Last revised: 30 Aug 2023

See all articles by Christian Cox

Christian Cox

University of Arizona - Department of Economics

Katherine Harris-Lagoudakis

Iowa State University

Date Written: July 27, 2023

Abstract

This paper evaluates demand when making unhealthy products, like soda, ineligible for purchase with in-kind benefits. We utilize policy variation to identify how product specific in-kind eligibility affects the marginal propensity to consume. Difference-inDifference estimates suggest a 14 to 21 percent decline in soda purchases if soda was made ineligible for purchase with Supplemental Nutrition Assistance Program (SNAP) benefits. We then estimate a model with mental accounting to rationalize observed patterns. We find that soda purchases would decline by 18 percent if soda were made ineligible. In addition, juice purchases would increase by 7 percent, decreasing sugars purchased from beverages.

JEL Classification: D12, I12, I18, I38, L66

Suggested Citation

Cox, Christian and Harris-Lagoudakis, Katherine, In-Kind Benefits and Behavioral Demand (July 27, 2023). Available at SSRN: https://ssrn.com/abstract=4146549 or http://dx.doi.org/10.2139/ssrn.4146549

Christian Cox (Contact Author)

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States

Katherine Harris-Lagoudakis

Iowa State University ( email )

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