When the Food Stamp Program began, its focus was on

providing participants with the purchasing power to get

enough to eat. Today, with obesity the most prevalent

nutrition problem facing Americans at all economic levels, promoting diets that provide enough nutrients without too many calories is also an important objective. Like

most Americans, food stamp participants tend to consume

too much saturated fat and added sugars and too few fruits

and vegetables. In response, the Food Stamp Program has

increased its emphasis on encouraging healthful food

choices by participants, primarily through expanded

nutrition education efforts. 

Identifying effective policies to promote healthful behaviors without limiting individual choice is difficult. Traditional economic thinking assumes that consumers who

understand and value the relationship between diet and

health will rationally respond by choosing to eat a healthful diet. Yet behavioral economics research finds that

people regularly and predictably behave in ways that contradict this assumption. Long-term thinking may not

always prevail; people may not always make the decisions

that would follow from strict expectations of economic

rationality, and they may be unduly influenced by seemingly irrelevant factors like package size and shape. Although this may sound discouraging, behavioral economics may suggest some strategies for bolstering the effects

of rational change strategies, such as nutrition education.

Findings from behavioral economics, consumer psychology, and marketing research suggest a new array of

strategies that can be tested to determine their effectiveness in improving the diet quality of food stamp participants. Unlike more traditional economic approaches,

these strategies do not impose costs on those who currently behave in their best, long-term interest, and unlike

arbitrary directives that would ban or impose penalties on

the purchase of unhealthy foods, they do not restrict freedom of choice. In addition, they do not necessarily

impose additional costs to those who are food insecure or

living at the margins. However, a thorough analysis of

costs, benefits, and potential impacts—a task outside the

scope of this discussion—would be needed before any

strategy could be considered as a policy option.

Simple Commitment Devices 

May Help Increase Self-Control

Do we really behave rationally to maximize our wellbeing, as economic theory suggests? Not always, according to behavioral economics. One often observed departure from rational economic behavior is the manner in

which consumers change how they rank alternatives

depending on the delay of economic costs and benefits.

For example, consumers often choose a cheaper, less

energy-efficient appliance over one that has a higher

retail price even when, because of greater energy efficiency, the initial cost difference would be made up in

less than a year. Similarly, an individual may prefer $10

today over $15 tomorrow but, if asked to choose between

the same two alternatives a year ahead of time, would

choose to wait the extra day for $15. Choosing an economically less desirable alternative simply because it is

available sooner suggests the difficulties of maintaining

the self-control necessary for long-term thinking. Sensory

Can Food Stamps Do More to Improve Food Choices? An Economic Perspective

Making Healthy Food 

Choices Easier

Ideas From Behavioral Economics

Lisa Mancino, Margaret Andrews

United States

Department of

Agriculture

Economic 

Research

Service

Economic Information Bulletin Number 29-7 September 2007

PhotoDisc
cues—such as walking past a plate of brownies or smelling

freshly baked cookies—can also weaken resolve. Given the

difficulty of maintaining self-control, individuals can

improve their longrun well-being through some sort of

commitment mechanism that sets limits on current consumption levels.

Within the Food Stamp Program, participants may be more

likely to choose foods that are compatible with their longterm health objectives if they make their purchasing decisions before going to the store and finding themselves

tempted with less healthful food options, such as salty

snack chips and soft drinks. One way to do this would be

allowing participants to elect an option to preorder a food

basket for delivery or pickup, which could be done through

local nonprofits or commercial grocery outlets.

USDA’s recent experience with demonstration projects in

Connecticut and North Carolina provides some evidence that

a segment of elderly food stamp participants does indeed view

preordering a commodity foods package as a way of making more healthful dietary choices (Cody and Ohls, 2005).

In 2002-04, Connecticut ran a Food Connection demonstration in 10 towns in the Hartford region where, instead of

standard food stamp benefits (issued by Electronic Benefit

Transfer (EBT)), seniors could elect to receive bimonthly

food packages that were available in three commodity combinations—regular, Latino, and items geared towards Meals

on Wheels participants. Packages were distributed at various community sites, most commonly senior centers, housing complexes, and churches. In a similar effort, North Carolina ran a Commodity Alternative Benefit program in rural

Alamance County in 2002-05, where seniors could elect to

receive one of two commodity food packages each month

instead of food stamp benefits. Although the two food packages differed slightly in terms of items or quantities, each

monthly package consisted of six bags, five with canned

foods and one with butter, cheese, and frozen meat and

poultry. For both demonstration sites, the cost of the food

packages was limited to that of the average benefit received

by senior households—about $45—which included the cost

of the food, shipping, and storage. The comparable price of

the package contents at a local grocery store was between

$60 and $70.

The average elderly participant in the demonstrations got

more food than could have been bought with the usual benefit, which was a powerful incentive affecting his or her decision to participate. But, evaluation results from both sites

suggest that getting better quality food was also a significant reason for participation among those who elected the

commodity alternative. More than half of surveyed participants in North Carolina who elected the commodity alternative mentioned getting better quality food as a reason for

participating, as did more than a third in Connecticut (fig.1).

Quality of food was even more frequently mentioned by

surveyed seniors who chose not to participate; 59 percent of

surveyed households that did not select the commodity

option in North Carolina and 69 percent in Connecticut

believed that they could get better quality food at stores.

Further research is needed to determine the extent to which

their perception of the quality of food is associated with

nutritional value, whether participants seeking to improve

their diets would find it helpful to select a commodity precommitment option, and, if so, how much their diets would

improve.

2 Economic Research Service/USDA

Other reason

Regular food stamp benefits embarassing in store

Did not like EBT card

To carry fewer groceries (package delivered)

Would get better quality food

Liked particular items in the package

Would get more food than regular Food Stamp Program

To try something new

North Carolina

Connecticut

Percent of respondents

0 10 20 30 40 50 60 70 80

Note: Clients could provide more than one reason.

*Significantly different from Connecticut (alpha=0.05).

Figure 1

Reasons correspondents gave for selecting commodities over EBT in elderly nutrition pilot studies in 

Connecticut and North Carolina
These findings highlight the different preferences that individuals had for the commodity option: Some felt it

improved the quality of their food choices; others did not.

Thus, offering food stamp participants options for choosing

how and when they receive their benefits may be useful. 

Another program change that might help some participants

avoid impulsive behavior and make better long-term choices is to allow them to increase the frequency with which

their standard food stamp benefits are disbursed. Benefits

are distributed only once a month, and evidence shows a

period of overconsumption shortly after benefits are distributed, followed by a period of rationing or underconsumption later in the cycle (Wilde and Ranney, 2000). This cycle

may be even more pronounced among individuals with selfcontrol problems—they will likely spend too much for current consumption at the expense of future consumption.

Increasing the frequency of benefit disbursements could

function as another commitment mechanism. Thus, decreasing the amount available for current consumption at each

decision period, while leaving total payment amount

unchanged, could help some clients make better and more

time-consistent decisions.

Of course, some less impulsive individuals may prefer

receiving food stamp benefits monthly, which may afford

them fewer shopping trips or greater ability to obtain volume discounts. Allowing participants to choose weekly,

biweekly, or monthly benefits would ensure that participants who wanted a commitment device could get one,

while others could choose to stay with the current monthly

payment arrangement.

Mentally, We Might Not Be the 

Most Accurate Accountants

Economic policy approaches that employ food taxes or subsidies would have both an income and a substitution effect.

With the positive income effect of a food subsidy, individuals increase food purchases in response to more room in

their budgets. This change in price may also have a substitution effect as well, where people purchase more of the

relatively cheaper food. In the case of food, lowering food

prices may lead to only a slight increase in total food purchases while generating a much greater increase in expenditures on other items.

A contrasting behavioral view is that individuals use mental

accounting to categorize their income, earmarking it into

categories for specific purposes or specifying that it be used

within a certain timeframe. Mental accounting predicts that,

once the income is categorized, one will spend the earmarked amount, irrespective of changing market conditions.

Thus, if a portion of increased income is dedicated to current food spending, lowering prices within this category

may not be perceived as loosening one’s total budget and

instead cause an individual to increase only food purchases.

In this case, finding a low price on a consumption item may

lead to overconsumption rather than substitution.

The idea of earmarking funds and mental accounts may

help explain why many studies have found that food stamp

benefits raise food expenditures more than does an equal

benefit amount given as cash (Fox et al., 2004). If this is the

case, then program modifications that would provide further

guidance on the share of food stamp allotments that should

go toward purchasing healthful foods, such as fruits, darkgreen vegetables, and whole grains, could have the effect of

increasing the purchase of more healthful items among 

program participants.

While there is little direct research that supports this specific application, the general concept of mental accounts has

been demonstrated. Thus, it is conceivable that programselected earmarks, communicated to participants through

special vouchers, supermarket-generated coupons, or educational outreach, could be effective. Ongoing Food Stamp

Nutrition Education efforts, a component of the Food

Stamp Program, may provide some insights in this area.

Another similar approach would be to allow individual participants to impose their own earmarks by putting limits on

the amount of EBT benefits they could use to purchase less

healthy foods. However, monitoring the types of foods and

beverages purchased with EBT benefits would require substantial cooperation of food retailers and administrative

effort. The complexity and cost of limiting the types of

foods allowed for purchase with food stamp benefits have

been cited by USDA’s Food and Nutrition Service as major

barriers to adopting such an approach (USDA, 2007). 

Certainly, studies assessing cost and feasibility would be

needed before implementing such strategies.

We Won’t Judge a Book by Its Cover, but We

Might Judge a Serving by Its Container

According to ERS data on food consumption, the daily

quantity of calories (per capita) available in the U.S. food

supply increased by more than 500 calories between 1970

and 2004. Americans are eating more food. For people trying to manage health and weight, choosing the right amount

of food may be just as difficult as choosing the right types

of foods. Studies find that choosing what to eat and how

much to eat may be controlled by separate psychological

mechanisms (see Just et al., 2007, for a review of the consumption volume literature).

The increase in portion sizes over the last 25 years or so is

often cited as a contributor to the rise in obesity in the United States. Research shows that people eat more when presented with larger portions or packages. They are also less

Economic Research Service/USDA 3
accurate in assessing their own intake: They underestimate

their own total consumption more when eating from larger

packages than when eating from smaller packages.

The shape of serving containers—bowls, plates, and glasses—can significantly affect consumption volume as well.

People tend to fill tall thin glasses less than short wide

glasses that hold the same volume. Experiments have also

shown that, when people were randomly given bigger serving bowls or ice cream scoops, those people unknowingly

served themselves (and ate) significantly more ice cream

than people who were give smaller bowls or scoops.

Research also shows that other alterations in food packaging or presentation may make assessing consumption volume easier. Introducing more intermediate packaging in

containers of chips or other items bought in large quantities

appears to draw attention to consumption volume and make

it easier for individuals to determine an appropriate stopping point.

Highlighting the effects of container shape and product

packaging on consumption volume in Food Stamp Nutrition

Education would be one way to incorporate these findings

into the Food Stamp Program. Such advice should, of

course, be balanced by acknowledgment that single serving

sizes or small containers may be a more expensive alternative than buying in bulk. 

The Food Stamp Program may have opportunities to apply

these findings more directly. For example, the program

allows Food Stamp Nutrition Education to provide low-cost

“nutrition education and reinforcement materials” (less than

$4 per item). These funds could be used to give interested

program participants glasses, dishes, or bowls that contain

some sort of visual graphic to indicate appropriate portion

sizes. For grocery purchases, lower prices or bonuses for

other purchases could be offered to participants for choosing products that are packaged to promote more sensible

consumption volume, such as 100-calorie snacks and single-serving soda cans.

Next Steps

Findings from behavioral economics suggest innovative,

low-cost ways to improve the diet quality of food stamp

participants. Unlike more traditional interventions, such as

changing prices or banning specific food items, many of the

proposed changes could be targeted to only participants

who wanted to make choices that are more harmonious

with their own long-term health objectives. These changes

have the added benefit of being more flexible and less

paternalistic than other proposed interventions.

Incorporating some of these techniques, such as increasing

the frequency of benefit distributions, into existing programs may require only slight modifications. Other options,

like delivering preordered food packages to food stamp

households, may be more costly or complicated. As such,

an important area for research would be to design experiments and pilot programs to gauge the feasibility and costs

of these strategies as well as the potential for change in

behavior, and ultimately, improvement in food choices and

diet quality. 

Information Sources

Cody, Scott, and James Ohls. Evaluation of the USDA Elderly

Nutrition Demonstrations: Volume I, Evaluation Findings, Contractor and Cooperator Report No. 9-1, U.S. Department of Agriculture, Economic Research Service, July 2005, available at:

http://www.ers.usda.gov/publications/ccr9-1/.

Fox, Mary Kay, William Hamilton, and Biing-Hwan Lin, eds.

Effects of Food Assistance and Nutrition Programs on Nutrition

and Health: Volume 3, Literature Review, Food Assistance and

Nutrition Research Report No. 19-3, U.S. Department of Agriculture, Economic Research Service, December 2004, available at:

http://www.ers.usda.gov/publications/fanrr19-3/.

Just, David, Lisa Mancino, and Brian Wansink. Could Behavioral

Economics Help Improve Diet Quality for Nutrition Assistance

Program Participants? Economic Research Report No. 43, U.S.

Department of Agriculture, Economic Research Service, June

2007, available at: http://www.ers.usda.gov/publications/err43/.

U.S. Department of Agriculture, Food and Nutrition Service.

Implications of Restricting the Use of Food Stamp Benefits,

March 2007, available at:

http://www.fns.usda.gov/oane/MENU/Published/FSP/FILES/

ProgramOperations/FSPFoodRestrictions.pdf.

Wilde, Park, and Christine Ranney. “The Monthly Food Stamp

Cycle: Shopping Frequency and Intake Decisions in an Endogenous Switching Regression Framework,” American Journal of

Agricultural Economics 82(1):200-13, February 2000.

4 Economic Research Service/USDA

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