The Effect of Electronic Benefit Transfer Cards on the Food Consumption of SNAP Recipient

Abstract

The Supplemental Nutrition Assistance Program (SNAP) provides food assistance to nearly 44 million Americans each year. I document a substantial increase in the program’s ability to stimulate food consumption from 1990 to 2010, as measured by the marginal propensity to consume food (MPCf) out of SNAP. I provide the first evidence for a mechanism driving this increase: the transition from paper coupons to Electronic Benefit Transfer (EBT) cards. Using plausibly exogenous variation over states and time I estimate that the introduction of EBT doubles the MPCf out of SNAP and accounts for 25 percent of its observed increase.