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Are People Ashamed of Paying with Food Stamps?

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  • Robert Breunig
  • Indraneel Dasgupta
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.

Suggested Citation

  • Robert Breunig & Indraneel Dasgupta, 2003. "Are People Ashamed of Paying with Food Stamps?," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(2), pages 203-225, July.
    • Handle: RePEc:bla:jageco:v:54:y:2003:i:2:p:203-225
    DOI: 10.1111/j.1477-9552.2003.tb00060.x
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    References listed on IDEAS

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    1. Haddad, Lawrence & Hoddinott, John & Alderman, Harold & DEC, 1994. "Intrahousehold resource allocation : an overview," Policy Research Working Paper Series 1255, The World Bank.
    2. Alderman, Harold, et al, 1995. "Unitary versus Collective Models of the Household: Is It Time to Shift the Burden of Proof?," The World Bank Research Observer, World Bank, vol. 10(1), pages 1-19, February.
    3. Besley, Timothy & Coate, Stephen, 1992. "Understanding welfare stigma: Taxpayer resentment and statistical discrimination," Journal of Public Economics, Elsevier, vol. 48(2), pages 165-183, July.
    4. J. William Levedahl, 1995. "A Theoretical and Empirical Evaluation of the Functional Forms Used to Estimate the Food Expenditure Equation of Food Stamp Recipients," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 960-968.
    5. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-1035, December.
    6. Chiappori, Pierre-Andre & Haddad, Lawrence & Hoddinott, John & Kanbur, Ravi, 1993. "Unitary versus collective models of the household : time to shift theburden of proof?," Policy Research Working Paper Series 1217, The World Bank.
    7. Rebecca M. Blank & Patricia Ruggles, 1996. "When Do Women Use Aid to Families with Dependent Children and Food Stamps? The Dynamics of Eligibility Versus Participation," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 57-89.
    8. repec:mpr:mprres:1253 is not listed on IDEAS
    9. Barbara Devaney & Thomas Fraker, 1990. "The Effects of Food Stamps on Food Expenditures: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 732-733.
    10. Thomas M. Fraker & Alberto P. Martini & James C. Ohls, 1995. "The Effect of Food Stamp Cashout on Food Expenditures: An Assessment of the Findings from Four Demonstrations," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 633-649.
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    Cited by:

    1. Robert Breunig & Indraneel Dasgupta, 2005. "Do Intra-Household Effects Generate the Food Stamp Cash-Out Puzzle?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 552-568.
    2. Indraneel Dasgupta, 2007. "Women or Children? Intra-household redistribution under gender-asymmetric altruism," Discussion Papers 07/10, University of Nottingham, CREDIT.
    3. Dasgupta, Indraneel & Kanbur, Ravi, 2007. "Community and class antagonism," Journal of Public Economics, Elsevier, vol. 91(9), pages 1816-1842, September.
    4. Dasgupta Indraneel, 2011. "Mother or Child? Intra-household Redistribution under Gender-Asymmetric Altruism," Journal of Globalization and Development, De Gruyter, vol. 2(1), pages 1-27, August.
    5. Ewoudou, Jacques & Tsimpo, Clarence & Wodon, Quentin, 2009. "Stigma and the take-up of social programs," Policy Research Working Paper Series 4962, The World Bank.
    6. Celhay, Pablo & Meyer, Bruce D. & Mittag, Nikolas, 2022. "Stigma in Welfare Programs," IZA Discussion Papers 15431, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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