Craig Gundersen on Food Stamps

Last week, the Washington Post ran an interview with the agricultural economist Craig Gundersen on the food stamps program (officially known as the Supplemental Nutrition Assistance Program).  Craig has been researching this topic for decades and has a lot to say - much of which runs against what we regularly read in the media.  

Here's one little snippet:

So maybe people aren’t selling their EBT cards — but could they buy groceries with benefits and then sell them for cash? I hear from readers, for instance, who say they see people buying baby formula and reselling it.

There’s a couple things going on here. The first thing, with infant formula — I think they are probably thinking about the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). Theoretically, you could have someone who doesn’t tell the WIC person they’re breastfeeding so that they still get infant formula. But those are totally separate programs. Sometimes people lump the two things together.

With respect to SNAP — I can’t make sense of that, from a rational standpoint. Presumably, in this scenario, people are buying groceries with SNAP and then reselling those groceries at a lower price than what they cost in the store. Most off-SNAP purchases are inframarginal, meaning that they spent more than their benefit amount on food. So if someone sold their benefits, they would be giving up the opportunity to purchase food, and would have to purchase food with other funds.

The only group of people who this might make economic sense for are those who are not inframarginal — meaning they only spend $100 per month on food and they get $120 per month in SNAP benefits. They could sell that extra $20 of food they get on benefits. But even if that was happening, it would be such a small proportion of people. Who cares?

The whole thing is worth a read.