Issuance and Incidence: SNAP Benefit Cycles and Grocery Prices

Jacob Goldin, Tatiana Homonoff, and Katherine Meckel
Working Paper.

In-kind benefit transfer programs like the Supplemental Nutrition Assistance Program
(SNAP) are an increasingly important part of the U.S. safety net. Because states issue SNAP
benefits to each recipient once per month, retailers experience predictable cyclicality in consumer demand for food. In response to these fluctuations, retailers face incentives to vary
food prices throughout the month, potentially shaping the incidence of the benefits transferred
through the SNAP program. Using a large panel data set from households and retailers, we
document large intra-month cycles in food expenditures among that closely track state issuance policies. However, we find evidence that retailers do not vary their prices in response
to such fluctuations by an economically significant magnitude. This finding is consistent with
recent evidence showing that grocery retailers largely adopt a strategy of uniform pricing at
the expense of substantial increases in profits.

Wagner Faculty