Why Do Low-Income Households not Use Food Stamps? Evidence from an Experiment

Abstract

This paper explores why many low-income households do not participate in the Food Stamp Program. By analyzing detailed income and asset data from a sample of low-income households, we find that many households that appear to be eligible for food stamps in fact are not eligible. By conducting an experiment designed to investigate the role of information on participation in the Food Stamp Program, we observe that ignorance about the program contributes to nonparticipation. However, there is evidence that knowledge about the program is endogenous-households generally avail themselves of information about the program when the anticipated benefits of doing so are large.