SNAP is used 4x more than cash on food
Hilary W. Hoynes and Diane Whitmore Schanzenback, 10/2009, Professor of Economics and Public Policy and holds the Haas Distinguished Chair in Economic Disparities at the University of California Berkeley where she also directs the Berkeley Opportunity Lab. She is an economist who works on poverty, inequality, food and nutrition programs, and the impacts of government tax and transfer programs on low income families. Her current research examines how access to the social safety net in early life affects children’s later life health and human capital outcomes., PhD in Economics from Princeton University Institute for Policy Research Director at Northwestern University and economist who studies policies aimed at improving the lives of children in poverty, including education, health, and income support policies. Her work traces the impact of major public policies such as the Food Stamp Program, school finance reform, and early childhood education on children’s long-term outcomes. She is the Margaret Walker Alexander Professor in the School of Education and Social Policy., "Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program," American Economic Journal, https://www.sesp.northwestern.edu/docs/publications/1806083048551ecd407f747.pdf
Providing assistance to the poor through in-kind transfers, such as vouchers for food and housing, garners more political support than providing assistance in cash. Supporters of such policies believe that providing voucher payments for certain goods (such as groceries) will cause recipients to purchase more of the goods being subsidized, and that recipients will not be able to use public assistance to buy other, less socially desirable goods (such as alcohol or cigarettes). According to canonical economic theory, providing a transfer in-kind should lead to the same outcome as a similar-sized cash transfer as long as program participants are inframarginal. As a result, depending on consumer preferences, the provision of in-kind transfers (relative to cash) may have little to no impact on purchases of the actual goods being subsidized.
Despite strong theoretical predictions about consumer behavior, little empirical evidence has been brought to bear on the impact of providing in-kind transfers on consumer purchases.1 The Food Stamp Program (FSP) is one of the largest transfer programs for the low-income population. In 2004, for example, the program cost $27 billion and served 24 million people. This compares to $25 billion for Temporary Assistance for Needy Families and $33 billion for the Earned Income Tax Credit. It has been very difficult for researchers to isolate the causal impact of the FSP on food spending, nutritional intake, labor supply, and other outcomes. Because the program is national, there is no variation in program parameters (such as stark differences in state benefit levels or eligibility) that are typically exploited by researchers to measure program impacts. In the absence of programmatic variation, most researchers have studied the impact of the FSP by comparing food stamp recipients with eligible nonrecipients. Since we would expect participants and nonparticipants to differ in important, and potentially unobservable, ways (Janet Currie 2006), researchers have employed a variety of methods to control for selection into the program (see Thomas M. Fraker 1990 for a comprehensive review of the literature on food stamps and consumption).
In general, the literature conflicts with the canonical economic model and finds that food stamps increase food purchases among program participants by a much larger amount than would be predicted by the canonical economic model. These studies have found that the marginal propensity to consume food out of food stamp income is about four times higher than it is out of cash income (Fraker 1990). As a result, food stamp benefits worth $100 are thought to cause about a $17–$47 increase in food spending, while a cash transfer of $100 is associated with closer to a $5–$10 increase in food spending. But, as mentioned above, these results have been based on studies that rely on strong and untested assumptions.