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How were extra benefits spent?
This paper examines the spending effects of a pandemic-related change to the Supplemental Nutrition Assistance Program (SNAP), one of the largest U.S. aid programs. SNAP recipients received emergency allotments that significantly increased their monthly grocery funds in response to the pandemic. Using novel spending data that captures households‘ goods spending in full, I show that emergency allotments increased SNAP recipients‘ monthly food-at-home spending by approximately $100 compared to non-recipients. The estimated Marginal Propensity to Consume food out of extra benefits is approximately 0.5, which is larger than cash. SNAP recipients increased spending on products with longer shelf lives and higher nutrition, which might otherwise be less affordable. However they also increased spending on beverages and snacks. Various non-food goods spending measures show little to no change. I support these empirical findings with a household survey to provide a comprehensive understanding of how extra SNAP benefits influenced spending patterns during the pandemic.
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