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Abstract

This paper examines the relationship between SNAP participation and prices paid for food items. To test this relationship, we develop an expensiveness index following the method of Aguiar and Hurst (2007) and use the FoodAPS data set. Using the ordinary least squares method and controlling for endogeneity using the Lewbel (2010) method, we found SNAP participation did not hold a statistically significant relationship with the prices paid for food items when we controlled for consumer behavior and food market variables. This indicates that SNAP participants are not systematically disadvantaged in their food purchases. Additional efforts to further educate SNAP participants of effective shopping and budgeting habits may be fruitful in helping households pay comparatively lower food prices.

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