The Food Stamp Program provides benefits that lowincome households can use to purchase food in grocery

stores. Research shows that the program is successful in

increasing the amount of food purchased and eaten by

program participants, who numbered more than 26 million each month in fiscal 2006. However, the rise in obesity and diet-related chronic diseases has focused

increased attention on how the program can promote not

just an adequate quantity of food (that is, calories), but

also healthier food choices, that bring consumption more

in line with Federal dietary recommendations.

Fruit and vegetable consumption is particularly low, and

the perceived high cost of these foods has been suggested

to be a barrier to food stamp participants purchasing and

consuming them. This raises the question of food purchasing power as a barrier to making more healthful food

choices; for example, if participants received higher levels

of benefits, would they purchase more fruits and vegetables? To gain some perspective on this question, this

report examines household food spending patterns and

how they differ across income levels. Differences in

household spending by income can provide insight into

how participants might change their food spending in

response to additional income. 

Because policy discussions aimed at increasing purchase

and consumption of fruits and vegetables focus on fruits

and vegetables purchased as separate items in grocery

stores, this report also focuses on the category of fruits

and vegetables in fresh, canned, frozen, dried, or juice

forms purchased as separate items in grocery stores.

Although both food away from home and “other foods”

likely contain fruits and vegetables—such as the lettuce,

tomato, and onion in a restaurant’s hamburger or the

tomato sauce in frozen lasagna—their cost is likely to be

higher than if the fruit and vegetable components had

been purchased as separate grocery store items. Previous

ERS research indicates that, on average, food away from

home accounts for less than half a serving of fruit daily

and one and a quarter servings of vegetables, most of

which are fried potatoes.

Food Stamp Benefits as Income

Food stamp benefits provide participants with increased

income for food purchases. These benefits are not targeted to specific foods; participants are free to buy almost

all foods available for sale in participating grocery stores

(hot prepared foods are a major exception). Research has

shown that food stamp benefits increase food purchases

but by less than the full amount of the benefits. Although

benefits may be used to purchase only food, a typical

food stamp household will cut back on some of the cash

previously used to buy food to meet other pressing nonfood needs, including housing, energy, and medical

goods that compete for a household’s budget. Thus, food

stamps not only increase spending for food purchasing

but also increase the household’s nonfood spending. 

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

Food Spending Patterns of 

Low-Income Households

Will Increasing Purchasing Power 

Result in Healthier Food Choices?

Elizabeth Frazao, Margaret Andrews, David Smallwood, Mark Prell

United States

Department of

Agriculture

Economic 

Research

Service

Economic Information Bulletin Number 29-4 September 2007

USDA/NAL
Despite shifting some cash to nonfood needs, participation

in the Food Stamp Program increases spending on food.

Estimates of the extra food purchased as a result of a $1

increase in food stamp benefits range from 17 to 47 cents.

Investigating how households spend additional income on

food provides insight into the likely effects of an increase in

benefits on fruit and vegetable purchasing and consumption. An increase in income would be equivalent to an

untargeted benefit increase—that is, like current food stamp

benefits, increased benefits could be used to purchase whatever foods participants chose (other proposals to provide

targeted increases, such as vouchers or bonuses specifically

for fruits and vegetables, are discussed in “Improving Food

Choices—Can Food Stamps Do More?”).

To fully investigate whether additional food stamp benefits

would increase fruit and vegetable purchases, data are needed that differentiate between purchases made by food stamp

benefits and purchases made by cash income. In the

absence of such data, we turn to the Bureau of Labor Statistics’ Consumer Expenditure Survey (CEX) and its data on

household spending. The CEX enables us to link income to

total household food purchases, purchases of “food away

from home” (at dine-in and carryout restaurants), and food

purchased in grocery stores (separated into five food categories). Tracking purchases across major food categories is

important because of the competition for a household’s

food dollar.

Convenience and Enjoyment Compete 

With Nutrition for the Food Dollar

Food spending patterns of low-income households reveal

that, in addition to nutrients, these households seek other

qualities, such as taste, variety, convenience, and enjoyment, from their food expenditures. Data from the 2004-05

CEX shows this pattern by capturing the assorted uses of

the food dollar. For example, four-person households with

annual before-tax incomes between $10,000 and $14,999

(the lowest income group we examine, representing households with incomes of about 50-75 percent of the Federal

poverty level) spend 26 cents of a food dollar on food away

from home (fig. 1). Although the composition of food away

from home varies and the types of food away from home

are not recorded in the CEX, ERS research shows that, on

average, the foods consumers choose to eat away from

home are higher in calories but lower in nutrients than the

foods they choose to eat at home. 

The lowest income households spend the remaining 74

cents of the food dollar in grocery stores (fig. 1). The

largest expenditure, 22 cents, is for “other foods”—a 

miscellaneous catchall that includes frozen prepared meals,

canned and packaged prepared foods, snack foods, condiments and seasonings, sugar and other sweets, fats and oils,

and nonalcoholic beverages. Meat purchases are a close

second, accounting for 21 cents of the food dollar. Fruits

and vegetables (fresh, frozen, canned, dried, or in the form

of juice) are the third largest category purchased, at 12

2 Economic Research Service/USDA

Meat, poultry, fish, and eggs

Fruits and vegetables

Cereals and bakery products

Dairy

Other foods

$0.21

$0.12

$0.10

$0.09

$0.22

Grocery $0.74

Food away 

from home 

$0.26

1

Four-person households with annual before-tax incomes of $10,000-$14,999.

Source: Consumer Expenditure Survey, Bureau of Labor Statistics, 2004-05. 

Figure 1

Competing uses of the food dollar among low-income households1

Investigating how households

spend additional income on food

provides insight into the likely

effects of an untargeted benefit

increase.
cents, more than cereals and bakery products (10 cents) or

dairy products (9 cents). 

Many factors affect food spending. In this report, we focus

on food spending patterns of four-person households at different income levels, thereby comparing lower income and

higher income households of equal size. This simple, intuitive approach can yield valuable insight into the food

spending changes associated with income.

Food Spending Increases With Income

As income increases, total food spending also increases,

although the increase in food spending is smaller than the

increase in income (fig. 2). Most households with annual

incomes between $10,000 and $29,999 may be eligible for

food stamps at least part of the year since these income levels represent 50-150 percent of the Federal poverty level.

Average food spending increases from $413 per month for

households with incomes of $10,000-$14,999 to $487 per

month for households with incomes of $20,000-$29,999

(table 1). Monthly food spending increases to $679 and

then to $870 among households in the two highest income

categories, those with annual incomes beginning at

$50,000.

This pattern is consistent with Engel’s Law, a phenomenon

first observed by Ernst Engel, a 19th century German statistician who served as director of the Bureau of Statistics in

Prussia. He found that, as income increases, food spending

also increases but the proportion of income devoted to food

declines. In the CEX data for the United States, food spending rises from $413 to $870 per month across the seven

income categories, but the share of income devoted to food

drops from 37 percent for the lowest income households to

only 9 percent for the highest income households (those

with annual incomes of $70,000 or more) (fig. 3). Even

though food spending roughly doubles (from $413 to $870)

between the lowest and the highest income group, average

(after-tax) income increases by more than eightfold (from

$13,290 to $116,543), resulting in a lower income share for

food. The intuition behind Engel’s Law might be described

as a “food first” budget allocation for low-income households. Because food is an essential need, even low-income

households must devote at least a minimum amount to meet

that basic need. As income increases, households may spend

some of that additional income on food but increase their

spending more than proportionately on other, nonfood items.

The biggest driver behind the pattern of rising food spending is food away from home, which increases across the

seven income categories by $299 (from $107 to $406)—

and accounts for two-thirds (65 percent) of the $457

increase in food spending (see fig. 2). Spending on food

away from home increases by so much that its share of the

food budget increases with income from a low of about

one-quarter (26 percent) to nearly half (47 percent) for the

highest income households (fig. 4). 

Household Spending on Fruits and Vegetables

Is Steady Across Most Incomes 

Food stamp benefits are designed to be used in grocery

stores. For all income levels, food spending patterns at the

grocery store are consistent with what we found for the

lowest income households (see figs. 1 and 5). Spending on

“other foods” always exceeds spending on meats, which

always exceeds spending on fruits and vegetables, which

always exceeds spending on cereals, which exceeds spending on dairy products. 

Economic Research Service/USDA 3

0

200

400

600

800

1,000

10,000-

14,999

15,000-

19,999

20,000-

29,999

30,000-

39,999

40,000-

49,999

50,000-

69,999

70,000

and

over

Food spending (dollars)

Income (dollars)

Source: Consumer Expenditure Survey, Bureau of Labor Statistics, 

2004-05. 

Total food

Food at home

Food away from home

Figure 2

Monthly food spending among four-person 

households by annual household income

0

5

10

15

20

25

30

35

40

10,000-

14,999

15,000-

19,999

20,000-

29,999

30,000-

39,999

40,000-

49,999

50,000-

69,999

70,000

and

over

Income (dollars)

Source: Consumer Expenditure Survey, Bureau of Labor Statistics, 

2004-05. 

Percent

Figure 3

Share of annual household income spent on food

Share of income spent on food declines as income rises
4 Economic Research Service/USDA

10,000-

14,999

15,000-

19,999

20,000-

29,999

30,000-

39,999

40,000-

49,999

50,000-

69,999

70,000

and

over Income (dollars)

Source: Consumer Expenditure Survey, Bureau of Labor Statistics, 

2004-05. 

Percent

Figure 4

Share of annual household income spent on food 

away from home

Share of food budget spent on food away from home increases 

as income rises

0

5

10

15

20

25

30

35

40

45

50

0

20

40

60

80

100

120

140

160

180

10,000-

14,999

15,000-

19,999

20,000-

29,999

30,000-

39,999

40,000-

49,999

50,000-

69,999

70,000

and

over

Income (dollars)

Source: Consumer Expenditure Survey, Bureau of Labor Statistics, 

2004-05. 

Figure 5

Monthly food spending among four-person 

households by annual household income

Among four-person households, spending on fruits and 

vegetables is steady across most income categories

Food spending (dollars)

Other foods

Fruits and vegetables

Cereals and bakery products

Dairy products

Meat, poultry, fish, and eggs

Table 1

Average monthly food spending among four-person households by annual household income1

Before-tax income

Food expenditures 2 $10,000- $15,000- $20,000- $30,000- $40,000- $50,000- $70,000

$14,999 $19,999 $29,999 $39,999 $49,999 $69,999 and over

After-tax income (dollars): 

Annual 13,290 18,034 25,937 35,440 44,478 58,679 116,543

Monthly 1,107.50 1,502.83 2,161.42 2,953.33 3,706.50 4,889.92 9,711.92

Total food spending (dollars) 413 447 487 540 515 679 870

Share of after-tax income (percent) 37.3 29.8 22.5 18.3 15.3 13.9 9.0

Food away from home (dollars) 107 126 138 197 194 296 406

Share of total food spending (percent) 25.8 28.2 28.3 36.6 37.6 43.5 46.6

Food at home (dollars) 307 321 349 342 322 384 465

Meat, poultry, seafood, and eggs 87 78 99 89 84 94 110

Fruits and vegetables 50 54 55 49 51 57 76

Cereals and bakery products 42 49 47 46 45 53 65

Dairy products 37 37 39 40 40 46 52

Other food 92 103 109 119 102 134 161

Share of at-home food budget (percent) 29.9 32.2 31.3 34.8 31.6 35.0 34.7

Sample size (number of households) 502 541 1,349 1,508 1,625 2,903 7,240

1The income measure includes food stamp benefits, so increases in income already take into account the reductions in benefits among food stamp households that may accompany increases in income. 

2Food at home consists of foods purchased from grocery and other food stores. Food away from home is comprised of foods purchased from foodservice

institutions, such as restaurants, fast food places, and vending machines. Other food includes “miscellaneous”—which includes frozen prepared meals,

canned and packaged prepared foods, snack foods, condiments and seasonings, sugar and other sweets, fats and oils, and nonalcoholic beverages. A

large proportion of other foods likely contains some meat, cereal, fruits and vegetables, and/or dairy products. 

Source: Consumer Expenditure Survey, Bureau of Labor Statistics, 2004-05.
Compared with spending in the other food categories,

spending on “other foods” shows an upward trend across

the income groups. It typically rises somewhat from each

income group to its adjacent group, from a low of $92 per

month among the lowest income households to a high of

$161 per month among the highest income households

(table 1). 

Unlike spending on “other foods,” spending on meat does

not seem to increase systematically with income across

most income groups but sometimes rises and sometimes

falls as income increases (fig. 5). Monthly spending on

meat is $87 for the lowest income group compared with

$84 for households with an average after-tax income of

$44,478, which is more than triple the average after-tax

income of the lowest income group (table 1). Spending on

meat then rises to $94 for households with average after-tax

income of $58,679 and to $110 for the highest income

group. The trend in monthly dollar expenditures on meat

among households with incomes between $10,000 and

$49,999 seems to barely increase, if it rises at all, across

income ranges of several tens of thousands of dollars. An

upward trend becomes evident only after reaching the two

highest income groups. 

The relationships between expenditures and income for

each of the other major categories—fruits and vegetables,

cereals and bakery products, and dairy products—have

much in common with the relationship for meat expenditures and income. Dollar expenditures on these categories

basically hold steady across five income groups; only in the

two highest income groups are increases in expenditures

noticeable (fig. 5). 

Fruits and vegetables represent a category of particular

interest for those wanting to improve the nutritional quality

of diets. Monthly expenditures for fruits and vegetables

increase from $50 for households in the lowest income

group to just $51 for households in the $40,000-$49,999

income group and to $57 for households in the $50,000-

$69,999 income group. It then increases to $76 for households with incomes of $70,000 and above (table 1). 

Focusing on households in the two lowest income groups

(each of which meet the income eligibility requirements for

food stamps), we find that monthly spending on fruits and

vegetables increases $4 between households in the $10,000-

$14,999 group and households in the $15,000-$19,999

group (table 1). The associated increase in average income

across the two groups is $5,256, which translates into a

monthly difference of $395. If an income increase of

approximately $400 per month is associated with an additional $4 in spending on fruits and vegetables at the grocery

store, providing these households with an extra $100 in

monthly income (or potentially, in food stamps benefits)

may spur fruit and vegetable purchases by $1 per month for

the entire household, or roughly one extra apple or banana

every week for the entire household. Given that the average

food stamp household received $217 per month in December 2006, a $100 increase in monthly food stamps constitutes an increase in program expenditures of nearly onehalf, or $14 billion.

Our examination, therefore, shows us two major aspects of

fruit and vegetable spending patterns that are important to

recognize. First, an unconstrained increase in income barely

increases fruit and vegetable purchases across income

groups until the highest income group, with annual household incomes of $70,000 and more. Second, this steadiness

in household spending on fruits and vegetables across most

incomes is not something “peculiar” about fruits and vegetables but instead matches the same steadiness in spending

for meat, grains, and dairy. In contemporary America, food

spending rises with income—just as Engel observed 150

years ago in Prussia—but the form that the additional

spending takes nowadays is food away from home and

“other foods” at the grocery store.

Spending Is Not the Same as Consumption

Food expenditures serve as a proxy for food consumption

because they represent the primary means for acquiring

food. However, although higher food expenditures may be

associated with the purchase of more food, more food can

also be obtained by careful shopping and food selection or

by avoiding waste from food supplies. Conversely, more

expensive foods may be purchased, resulting in higher food

expenditures without greater quantities. In addition, food

expenditures may differ depending on whether households

are spending cash or food stamp benefits.

Evidence shows that a dollar in food stamp benefits increases food purchases by more than a dollar of cash. Thus, food

spending patterns can provide but a partial answer to the

question of how increasing untargeted food stamp benefits

could change food consumption and diet quality. However,

these findings, from a major national survey of household

expenditures, suggest that additional income would likely

Economic Research Service/USDA 5

In contemporary America, food

spending rises with income...but

the form that the additional

spending takes nowadays is food

away from home and “other

foods” at the grocery store.
result in little increase in fruit and vegetable purchases.

Additional untargeted food stamp benefits may act differently from cash, but the research is not encouraging. A

study by Wilde et al., using national food consumption data

and employing more sophisticated analytical methods,

found that receiving food stamps was not associated with

greater consumption of fruits and vegetables. 

Low-Income Households Not Likely 

To Spend Much Additional Income on 

Fruits and Vegetables

These findings hint at the challenge policymakers face

when trying to prompt greater purchases and consumption

of fruits and vegetables. If just part of income is used for

food purchases, and just a small part of those food purchases are devoted to fruits and vegetables, what could be

expected from an untargeted increase in food stamp benefits?

The evidence is not promising for achieving large gains in

fruit and vegetable purchases through increasing food

stamp benefits (at least to the extent that households

respond to food stamp increases roughly as they do to

money income increases). To conclude that households do

not buy any extra fruits and vegetables as income rises may

be too strong: Households in the two lowest income groups

do, in fact, spend more on fruits and vegetables when

income goes up—just not very much more. 

The conclusion that low-income households are not likely

to spend much additional income (or untargeted food stamp

benefits) on fruits and vegetables is consistent with research

findings that nearly all households—not just low-income

households—consume low amounts of fruits and vegetables

relative to Dietary Guidelines for Americans (DGA) recommendations. The knowledge that even higher income households do not consume enough fruits and vegetables to meet

DGA recommendation suggests that other factors besides

income play a strong role in fruit and vegetable purchasing

behavior.

With food away from home and “other foods” as the two

strong responders to income changes, consumers seem to

be choosing to spend their additional income on some combination of increased quality, convenience, and variety.

Although these food groups are likely to include some

fruits and vegetables, the extent to which they contribute to

fruit and vegetable consumption is not known. In addition,

their fruit and vegetable contribution is likely to be at a

higher cost than the cost of individual fruits and vegetables,

representing the cost of increased quality, convenience,

and/or variety. 

The simple method used here to examine food spending

patterns focused on four-person households. For these

households, increased spending on fruits and vegetables

appears to occur in the food budgeting process only as

annual incomes reach and pass $70,000. This finding is

consistent with other ERS studies that used more advanced

statistical methods to control for many different household

characteristics simultaneously. A study by Blisard et al.

(2004) that focused on fruit and vegetable expenditures

found that low-income households were unlikely to increase

spending on fruits and vegetables when they were given an

extra dollar in income or food stamps. As discussed previously, the study by Wilde et al. found that receiving food

stamps was not associated with greater consumption of

fruits and vegetables. Thus, more sophisticated studies of

both food purchasing and consumption support the conclusion that additional income alone would likely lead to little,

if any, added purchases of fruits and vegetables.

Targeted benefits, such as bonuses and vouchers for specific

foods, such as fruits and vegetables, may be more effective

and efficient ways to increase purchase and consumption of

the specific foods. Combining bonuses or vouchers with

other approaches to dietary change, such as nutrition education, and innovative changes in program design suggested

by behavioral economics and consumer psychology may

increase effectiveness, although research and evaluation are

needed to assess their benefits (see Nutrition Information:

Can It Improve the Diets of Low-Income Households? and

Making Healthy Food Choices Easier: Ideas from Behavioral Economics in this series).

Information Sources

Blisard, N., H. Stewart, and D. Jolliffe. Low-Income Households’

Expenditures on Fruits and Vegetables, Agriculture Economic

Report No. 833, U.S. Department of Agriculture, Economic

Research Service, May 2004, available at:

http://www.ers.usda.gov/Publications/aer833/.

6 Economic Research Service/USDA

Even higher income households

do not consume enough fruits

and vegetables to meet

recommendations, suggesting

that other factors besides income

play a strong role in fruit and

vegetable purchasing behavior.
Guthrie, J.F., B-H. Lin, J. Reed, and H. Stewart. “Understanding

Economic and Behavioral Influences on Fruit and Vegetable

Choices,” Amber Waves 3(2):36-41, April 2005, U.S. Department

of Agriculture, Economic Research Service, available at:

http://www.ers.usda.gov/Amberwaves/April05/Features/

FruitAndVegChoices.htm.

Lin, Biing-Hwan, E. Frazão, and J. Guthrie. Away-From-Home

Foods Increasingly Important to Quality of American Diet, Agriculture Information Bulletin No. 749, U.S. Department of Agriculture, Economic Research Service, January 1999, available at:

http://www.ers.usda.gov/Publications/aib749/.

Wilde, Parke, P. McNamara, and C. Ranney. The Effect on

Dietary Quality of Participation in the Food Stamp and WIC Programs, Food Assistance and Nutrition Research Report No. 9,

U.S. Department of Agriculture, Economic Research Service,

September 2000, available at: 

http://www.ers.usda.gov/Publications/fanrr9/

Economic Research Service/USDA 7
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age,

disability, and, where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs,

reprisal, or because all or a part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should

contact USDA's TARGET Center at (202) 720-2600 (voice and TDD). 

To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410

or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer.