SNAP: Is it Enough?

An article by the United States Census Bureau caught my eye the other day. It said that about 32 million people lost some of their government food assistance in March 2023 because the federal government ended emergence allotments (EAs). States could use EAs to increase Supplemental Nutrition Assistance Program (SNAP) benefits as long as the federal government still had its public health emergency (PHE) in effect and the state had issued an emergency or disaster declaration. The PHE ended in March 2023. Montana distributed EAs in 2020, but ended EAin July 2021 (View USDA Food and Nutrition Service "SNAP Emergency Allotments are Ending") . However, the article went on to say that the share of SNAP-receiving households who reported that they “sometimes” or “often” did not have enough food to eat was consistently higher in states that ended EAs early than in states that did not. Yet, food insecurity rates in states that recently ended the EAs are now similar to states that ended them early (Brown et al, 2023).

There is vast economics literature on SNAP benefits, including literature documenting the positive association between SNAP benefits and food security, health outcomes, and economic self-sufficiency (see, for example Li and Cakir, 2021). However, the recent economic disruptions caused by the pandemic combined with inflationary prices in grocery stores might require further examination of policies that help households access better and more consistent nutrition.

It is estimated that 1 in 10 people in Montana face hunger.¹ The Montana Food Bank Network distributes more than 15.6 million meals per year.² However, the number of persons participating in SNAP in Montana decreased 4.8 percent from December 2021 to December 2022.³ Many factors could be responsible for the decrease in SNAP participation, including increased income and reduced eligibility and household migration. However, a recent study in the American Journal of Agricultural Economics ⁴ shows that SNAP take-up is higher in states where the purchasing power of SNAP benefits is greater (due to relatively lower food costs). These findings suggest that participation in SNAP is a complex decision and not cost-free. For some demographic groups, take-up might be particularly costly or difficult. For example, it has been shown that elderly people who do not have vehicles or who live in food deserts are particularly vulnerable to food insecurity (Fitzpatrick et al 2016).

Numerous studies show that households that receive SNAP benefits consume more than 80% of their benefits within the first 2 weeks (Castner and Henke 2011), leading to a pattern of consumption known as the “SNAP benefit cycle”. This cycle is the combined result of inconsistent time preferences (e.g. I would rather consume a lot today and worry about tomorrow later) and the observed effect of receiving benefits that households cannot substitute for other needs. That is, if households wanted to purchase more SNAP eligible purchases per month than the value of their SNAP benefits, then they could perfectly substitute SNAP benefits for cash. That does not appear to be the case for most households though. SNAP effectively forces households to spend a greater share of their benefits on SNAP-eligible items than they would if they received equal benefits in cash (Smith et al 2016). This makes economists question whether SNAP efficiently redistributes benefits. Suppose, for example, that households might be able to better spend these benefits on ineligible items. However, one might argue that SNAP forces households to make more nutritious purchases, which has positive spillovers for society. This potential relationship is difficult to measure. In 2021, 41.5 million people (12.5% of the U.S. population) received SNAP benefits. SNAP is the largest nutrition assistance program in the United States. Yet, the share of food-insecure households in the United States consistently remained above 10% for decades (Li and Cakir, 2021). As food prices continue to rise, perhaps it is time to consider how we as a nation can better serve our neighbors who are food insecure.

Works Cited

Brown, A.R., Giefer, K.G., and King, M.D. (April 27, 2023) “Impact of the End of Extra SNAP Benefits: Roughly 32 Million people Now Receiving Less Government Food Assistance” U.S. Census Bureau story. https://www.census.gov/library/stories/2023/04/impact-of-the-end-of-extra-snap-benefits.html Accessed April 28, 2023

Castner, L. and Henke, J. 2011. “Benefit Redemption Patterns in the Supplemental Nutrition Assistance Program.” USDA-FNS.

Fitzpatrick, K., Greenhalgh-Stanely, N., and Ver Ploeg, M. 2016. “The Impact of Food Deserts on Food Insufficiency and SNAP Participation among the Elderly.” American Journal of Agricultural Economics 98(1): 19-40.

Li, Qingxiao and Cakir, Metin. 2021. “Estimating SNAP purchasing power and its effect on participation” American Journal of Agricultural Economics. DOI: 10.1111/ajae.12399

Smith, T.A., Berning, J.P., Yang, X. , Colson, G. , and Dorfman, J.H. 2016. “The Effects of Benefit Timing and Income Fungibility on Food Purchasing Decisions among Supplemental Nutrition Assistance Program Households” American Journal of Agricultural Economics 98(2): 564-580.

¹ Montana Food Bank Network https://mfbn.org/ Accessed April 28, 2023

² Feeding America “Montana Food Bank Network” https://www.feedingamerica.org/find-your-local-foodbank/montana-food-bank-network Accessed April 28, 2023

³https://fns-prod.azureedge.us/sites/default/files/resource-files/29SNAPcurrPP-3.pdf

⁴ Li, Qingxiao and Cakir, Metin. 2021. “Estimating SNAP purchasing power and its effect on participation” American Journal of Agricultural Economics. DOI: 10.1111/ajae.12399 https://onlinelibrary.wiley.com/doi/full/10.1111/ajae.12399