Are People Ashamed of Paying with Food Stamps

Robert Breunig, Robert Breunig, Indraneel Dasgupta

    Research output: Contribution to journalArticle

    Abstract

    We evaluate the claim that marginal 'welfare stigma' causes a dollar of food to provide less utility if bought with food stamps rather than cash, and that this explains why, in the United States, the marginal propensity to consume food out of food stamps is larger than that out of income. This hypothesis has been advanced to explain the so-called 'cash-out puzzle': the empirical observation that the marginal propensity to consume food out of food stamps is much higher than that out of income, even for households who spend some cash income on food. We develop a theoretical model to identify the restrictions imposed by the hypothesis that the puzzle is indeed caused by such stigma. Using data from San Diego County, we find that two of the three predictions of the marginal stigma model are violated. These results cast serious doubt on the marginal stigma hypothesis.
    Original languageEnglish
    Pages (from-to)203-225
    JournalJournal of Agricultural Economics
    Volume54
    Issue number2
    Publication statusPublished - 2003

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