From Storefronts to Screens: The Impacts of Online Grocery Shopping on Public Food Assistance Users

• In Event: Understanding SNAP’s Reach and Impact: Evidence from Households, School Programs, and Markets

Abstract

Many anti-poverty programs are in-kind, and adoption of new technology can alleviate the challenges associated with redeeming benefits. This project investigates the growth of online grocery purchasing with food vouchers across retailer markets and its effects on low-income households who use benefits. Although the policy initially affected only the Supplemental Nutrition Assistance Program (SNAP), online purchases with new voucher programs for school children—Pandemic EBT and Summer EBT—were later covered under the authorizations. The proliferation of online shopping for benefit users was expected to improve participant experiences by reducing stigma, improving convenience and access to food stores, and streamlining voucher purchases—despite facing service fees and potentially higher product prices online.

I collect new data on initial authorizations of Electronic Benefit Transfer (EBT) transactions online across more than 400 food retailers and all fifty states between 2019-2024. I find that stores authorized for online benefit purchases were more likely to be large retailers located in urban and higher-income counties, even when compared to those authorized for in-store purchases only.

Then, I use quasi-experimental spatial variation in EBT online purchasing availability to estimate effects on benefit redemption patterns and SNAP enrollment. Benefit redemption data at the state-by-store type level comes from the U.S. Department of Agriculture, Food and Nutrition Services’ Store Tracking and Redemption System (STARS). SNAP enrollment data at the county-month level was compiled from individual state websites based on availability.

I find that online exposure led to a $16 increase in monthly online EBT spending per household. Households substitute away from in-store spending at large food retailers (supermarkets and super stores). Following a large drop in SNAP benefits from the staggered removal of Emergency Allotments, participants decrease online grocery spending more than dollar-for-dollar, suggesting that EBT consumers are willing to pay for convenience under higher incomes. Finally, I find that online grocery purchasing availability increases local SNAP participation by 4 percent, primarily by increasing retention of existing participants. These results suggest that policies which reduce benefit redemption frictions can improve the effectiveness of in-kind benefit programs.

Author

• Kelsey Pukelis, Harvard University
  Presenting Author