We provide a case for maintaining welfare and income redistribution programs even when their adverse general equilibrium effects reduce total earnings of poor households. Using a Cournot model of intra-household decision-making, we show that even if welfare cutbacks generate large increases in...

Marginal propensity to consume food out of food stamps in the US is higher than that out ofcash income. We explain this in terms of differential impact of cash income and in-kindtransfers on intra-household division of cash. We develop a Cournot model of a multi-personhousehold where food...

Previous empirical studies have noted the higher marginal propensity to consume food out of food stamps in the United States, compared to that out of cash income. Analyzing data from U.S. Food Stamp Program participants, we find evidence that this discrepancy may be driven primarily by the...