Cyclical Food Purchasing Behavior Among Low-Income Households Receiving Nutrition Assistance

Abstract

The Supplemental Nutrition Assistance Program (SNAP) is the largest anti-hunger program in the United States. SNAP benefits are rapidly depleted immediately after disbursement. This phenomenon, known as the “benefit cycle,” is associated with adverse dietary, nutrition, and health outcomes. Despite significant interest in policy interventions to address the benefit cycle, longitudinal research evaluating cyclical food purchasing and the underlying mechanisms driving such behavior is limited. The primary aim of this dissertation is to evaluate trends in food expenditures after households receive nutrition assistance, and examine the benefit cycle using behavioral and traditional economic frameworks. This dissertation uses data from a prospective trial of low-income households receiving nutrition assistance. The first paper describes patterns in food purchasing before and after households receive benefits. After benefit distribution, cyclical expenditures were observed for all food categories. Although cyclical spending behavior was observed broadly across different households, lower food security and income was associated with more severe expenditure cycles. The second paper evaluates the association between food expenditures and shopper impulsivity, which has been cited as a potential driver of the benefit cycle and is a target of SNAP educational interventions. Total food expenditures were cyclical for all households, but patterned by impulsivity. Shopper impulsivity was associated with expenditures on foods high in added sugar, but not fruits and vegetables. Findings suggest that shopper impulsivity likely exacerbates behavioral mechanisms underlying the benefit cycle, but is not the primary driver. The benefit cycle has also been attributed to time-inconsistent preferences, which suggests that households demonstrate a preference for immediate benefit consumption. The third paper evaluates how households discount utility across time, and whether observed time preferences explain cyclical food expenditures. Contrary to theoretical predictions, time-inconsistent preferences did not fully account for the benefit cycle. However, households with greater resources mitigated the benefit cycle and prioritized healthy foods when doing so. The final manuscript evaluates the impact of benefits over the course of the benefit cycle. Standard economic theory states that extramarginal households who receive more benefits than their typical food budgets respond sharply to increases in benefits. Given the relatively small portion of SNAP households who are extramarginal, the high marginal propensity to spend (MPS) out of benefits observed among SNAP households is incongruous with predictions. The fourth manuscript estimates the MPS out of benefits and cash across the benefit month by household extramarginality. Compared to other households, extramarginal households had a higher MPS out of benefits throughout the benefit month, but a lower MPS out of cash in the final two weeks. Extramarginal households also demonstrated a cyclical pattern in the MPS out of benefits. Results suggest that the benefit cycle can help explain the outsized MPS out of benefits reported in the literature, and a subset of extramarginal households may be driving more severe fluctuations in spending patterns. Understanding patterns in cyclical food purchasing and the mechanisms driving such behavior is critical for evaluating interventions to address the benefit cycle. Results from this dissertation suggest that interventions targeting households that are resource-constrained or extramarginal may help mitigate severe fluctuations in spending. Findings also suggest that policy proposals to help attenuate the benefit cycle—such as educational interventions for impulsive shoppers or more frequent benefit distribution to help households smooth consumption—should be directly evaluated to ensure their effectiveness.