The monthly food stamp cycle

Food stamp participants generally spend their food stamps quite rapidly after they arrive each month. There is some evidence that some food stamp participants end up with less actual food intake in the second half of the food stamp month. I measured these monthly cycles for the first time using national level data in my dissertation several years ago, and reported the main results in an article with Christine Ranney in the American Journal of Agricultural Economics. Later, Margaret Andrews and I studied the spending cycle (but not the intake cycle) further using data from the Electronic Benefit Transfer (EBT) cards that have replaced traditional food stamp coupons, in an article for the Journal of Consumer Affairs.

This topic has received renewed attention from economists recently, especially with a new article by Jesse Shapiro in the leading Journal of Public Economics. Shapiro uses the same food intake and EBT data that Margaret, Christine, and I used, and connects the food stamp cycle to recent theoretical work in economics about the role of extremely impatient behavior -- quasi-hyperbolic discounting -- which is inconsistent with the traditional theory called the permanent income hypothesis.

A novel part of Shapiro's article corroborates the possibility of extreme impatience using data from questions about time preferences, which were asked of food stamp participants in Maryland. I think Margaret Andrews, who oversaw that Marlyand project for USDA/FNS, was the clever mind behind including these questions in a food stamp study. For example, some of these questions are: "Now suppose you had a choice between getting $50 in cash 1 week from today, or getting less than $50 today. Would you take less than $50 to get the money today? What is the smallest amount of cash you would take today rather than getting the $50 1 week from today?" Shapiro has a neat table showing how the impatience increases in the last 7 days of the food stamp month.

There is some reason to worry that the monthly food stamp cycle leads to hunger at the end of the month, after food stamp benefits run out, even for families that in principle should have enough food resources on average. Knowing that there was enough food "on average" this month may provide little comfort to a family on the day or two that it is most hungry. Shapiro quotes one of my favorite passages from an earlier report by Mathematica Policy Research, in which food stamp participants in focus groups suggest that benefits should be distributed twice each month instead of all at once.

Give it to us in two installments. At the end of the month I'm dying [for money]. If you got it on the 1st and 15th, or whatever, it would be so much better. Checks or coupons, it doesn't matter, either way, but it does not last a month. The second part of the month is always a struggle.

With EBT, it should be fairly inexpensive to deliver benefits on this type of schedule. Is this done in any states, and if not, why not?