increase food supply, whereas minimum wages decrease product supply by increasing labor costs and exert demand-side effects by increasing the income of consumers. By contrast, as an in-kind electronic-benefit-transfers program, SNAP would mostly shift the demand curve without directly shifting the supply curve. Similar to Filmer et al. (2018), we find that transfer programs can have unintended consequences on both recipients and non-recipients through equilibrium effects.

Third, we contribute to a growing literature providing empirical evidence on how demand shocks affect prices. Recent work using retail scanner data suggests price responses to demand shocks can be significant. Stroebel and Vavra (2019) find a strong positive relationship between housing-price shocks and retail price indices at the zip-code level. They argue their results are driven by procyclical markups due to decreases in demand elasticities as a result of increases in housing wealth. Beraja et al. (2019) show a negative relationship between unemployment rates and retail prices at the state level.<sup>10</sup> Our paper shows that another source of demand shocks—in our context driven by government transfers—increases prices. We additionally contribute pass-through formulas that shed light on the factors that determine the size of the price response. We also show that regional pricing can be significant. DellaVigna and Gentzkow (2019) show that uniform pricing in retail chains are prevalent and suggest that the uniform pricing could dampen price response to local demand shocks. Nuancing their evidence, we find that grocery chains in particular price more flexibly or have limited geographic representations with stores spanning at most one or two states, such that prices in the sector show significant responses to locally clustered demand shocks.<sup>11</sup> Furthermore, our analysis provides an informative foil to results by Egger et al. (2022), who find a significant price effect but one that is an order of magnitude smaller than ours in their analysis of a general cash-transfer program provided to three subcounties (653 villages) in rural Kenya. Although some products showed price inflation as large as 1.2%, the marginal consumption propensity was generally dispersed, and individual and aggregated price responses across products (including food) were far smaller in their setting, contrasting with our setting where the MPC was concentrated on food. This comparison suggests the significant roles that in-kind designation of government electronic benefits and product-specific MPCs can play in influencing consumer demand and market outcomes.<sup>12</sup> This paper is structured as follows. Section 2 discusses the data we use and the

> and retailers. Meckel (2020) studies the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), another social program in the US.

> 10Earlier work such as Nakamura and Steinsson (2014) uses variation in military spending and alternative, sparser price data sources that do not derive from retail scanner data and find insignificant price effects.

> 11Butters et al. (2020) find that local prices can be more responsive to local cost shocks than to demand shocks, suggesting that retailers may set prices according to a constant markup over wholesale costs.

> 12Also at play may be heterogeneous market power across specific product markets.

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