Article

September 2013

Recent trends in spending patterns of Supplemental Nutrition Assistance Program participants and other low-income Americans

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Many consumer units take out loans for the purchase of homes and vehicles, and their monthly payment is split between principal and interest on the loan. Although the CE definition of expenditures includes the interest component of these payments, it excludes the principal component. This exclusion can cause expenditure totals for homeowners and vehicle owners to be downward biased. In a similar analysis of spending patterns that focused only on 2005, Laura Castner and James Mabli examined outlays, which include the principal and interest components of loan payments instead of expenditures, and found that the results were robust to the exclusion of these payments.6

Mean expenditures are estimated for each calendar year with the use of the methodology described in the CE-Interview documentation and the programs provided by BLS.7 Expenditure shares are estimated by dividing the mean expenditures for a specific category of goods and services by the mean total expenditures spent on all goods and services. All estimates are weighted on the basis of a survey weight for the total sample, called FINLWT21. Standard errors are calculated with the use of replicate weights provided by BLS. All estimates are adjusted to 2010 dollars with the use of annual values of the Consumer Price Index for All Urban Consumers.

The analysis estimates mean annual expenditures and expenditure shares for each of the three SNAP participation and eligibility groups. When interpreting findings, readers should consider the compositional differences among the three groups. For example, the average sizes of consumer units for SNAP participants, eligible nonparticipants, and higher income nonparticipants are 3.2, 2.1, and 2.5, respectively; the percentages of consumer units with children within these groups are 59 percent, 26 percent, and 33 percent, respectively.

The analysis accounts for differences in the size and composition of consumer units in two ways. First, because total expenditures are likely affected by size and composition, the analysis provides shares of total expenditures (in addition to absolute expenditures) when presenting expenditures on major budget categories of goods and services over time by participation and eligibility group. Second, when statistically comparing 2010 spending patterns across groups, the analysis presents findings according to whether consumer units contain children (age 17 and under).8 Some selected analyses also compare differences in expenditures across the three groups according to whether consumer units contain elderly members (age 65 and older) and according to whether consumer units rent or own the dwellings in which they live.

Changes over time in expenditures on major budget categories of goods and services

Figures 1 through 8 present annual total expenditures and annual shares of total expenditures spent on each major budget category by SNAP participants, eligible nonparticipants, and higher income nonparticipants. Budget categories include food, housing, apparel, healthcare, transportation, and other goods and services. Given that food expenditures are an important outcome measure for SNAP, the analysis divides them into spending on food at home and spending on food away from home and regards these components as separate major categories of goods and services.

Notes

6 Castner and Mabli, Low-income household spending patterns.

7 For the 2005 CE data, see 2005 Consumer Expenditure Interview Survey public use microdata documentation (Bureau of Labor Statistics, February 2007). See related documentation for other survey years.

8 The average sizes of consumer units with children for SNAP participants, eligible nonparticipants, and higher income nonparticipants are 4.3, 4.3, and 4.2, respectively; for consumer units without children, the sizes are 1.7, 1.4, and 1.7, respectively.

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About the Author

James Mabli
jmabli@mathematica-mpr.com

James Mabli is Associate Director of Human Services Research, Mathematica Policy Research, Cambridge, Massachusetts.

Rosalie Malsberger
rjm709@mail.harvard.edu

Rosalie Malsberger is a graduate student in epidemiology at the Harvard School of Public Health.