Smarter policies and healthier citizens are worthy goals. But good intentions alone won’t deliver them.
The MAHA (Make America Healthy Again) movement is coming for food stamps — but the law of unintended consequences may thwart its proposed reforms.
Trump administration officials, including HHS Secretary Robert F. Kennedy Jr. and Agriculture Secretary Brooke Rollins, want to end federal subsidies for unhealthy foods like soda, chips, and candy bars. That means restricting the range of foods households can purchase using Supplemental Nutrition Assistance Program (SNAP) funds. While improving the American diet would be beneficial, it’s unclear whether changing food stamps in this way would have the desired effect.
Intuitively, reducing the number of SNAP-eligible foods should change participating households’ behavior. No food stamps for potato chips should mean fewer potato chips eaten. But the economic way of thinking shows this intuition is misleading.
Households choose a bundle of foods to consume, some healthy and some unhealthy, based on the income they receive and the prices they confront. Suppose a household uses food stamps to afford their current bundle. How do their incentives change if Coke and Snickers are no longer covered by food stamps?
SNAP reform doesn’t affect the prices households see when they shop. It does affect income — some food bundles that were heavy on junk food are no longer affordable. This is the kernel of truth in the intuitive-yet-incomplete view.
Problems arise when we consider how households spend non-SNAP funds (ordinary income). Resources are partly fungible. If a household uses food stamps to buy fresh produce, that frees up non-SNAP funds to buy Pringles and Dr. Pepper. Whether healthy-food restrictions on SNAP expenditures change behavior depends on how prevalent junk foods are in a household’s current bundle. Households that don’t consume lots of junk food might not have to cut back at all. In fact, these households may end up consuming more junk food than before.
Whether limiting SNAP benefits to healthy foods will improve diets depends on how the policy is designed.
Suppose the government restricts SNAP purchases to healthy foods but does not increase the total benefit amount. Households may buy less junk food simply because they can’t use their SNAP dollars on it. But this doesn’t vindicate MAHA: We would only see big effects if junk food eats up a large share of SNAP households’ budgets.
As it turns out, SNAP households don’t spend exorbitantly on junk food. A USDA study found that, on average, SNAP users spend roughly 5 percent of their overall budgets on unhealthy food. While that’s far from trivial, it’s probably not large enough to make a big dent in junk food consumption. And, of course, many SNAP households spend even less.
But what if the policy also increases SNAP benefits to make up for the more limited range of eligible foods? This is a likely outcome, since MAHA will need to build support for reform legislation. Now the consequences are less clear. Families that used to buy a lot of junk food will cut back. Families that weren’t buying much junk food before, however, might end up consuming more overall. Instead of spending the extra money on healthy food, they might use it on junk food instead.
The final result depends on how the additional income changes people’s food choices. If families respond by buying more healthy food, the policy could improve diets. But if they use freed-up funds to buy more junk food outside the program, the effect is less certain and could even be detrimental.
This way of looking at the problem is characteristic of price theory, an approach to economics that puts careful reasoning about tradeoffs in the analytical foreground and mathematical ornamentation in the background. Providing households a public benefit boosts their consumption options beyond the narrow range of targeted goods. Subsidizing healthy food creates opportunities to purchase unhealthy food. The authors of Chicago Price Theory, a rigorous overview of the economic way of thinking, put it best: We can give people extra income, but we can’t control how they spend that extra income.
Smarter policies and healthier citizens are worthy goals. But good intentions alone won’t deliver them. MAHA needs a reality check in the form of sound economics. Without price theory, zealous health reformers will fail to achieve their goals and might even work against them.
Bryan P. Cutsinger is an economics professor in the College of Business at Florida Atlantic University. Alexander William Salter is an economics professor in the Rawls College of Business at Texas Tech University. Both hold fellowships with the American Institute for Economic Research.