Job Market Paper

Abstract. Many in-kind transfers are provided not as direct government transfers but rather as entitlements that allow recipients to access specific goods from private providers. This structure makes these providers key intermediaries, whose participation decisions can substantially impact the efficiency, access, and equity of in-kind transfer programs. Despite this significance, relatively little attention has been paid to how firms respond to these programs and the effects on benefit recipients, especially within the context of nutrition assistance. This study examines grocery retailers’ responses to changes in the Supplemental Nutrition Assistance Program (SNAP) following the adoption of Electronic Benefit Transfer (EBT) technology and explores subsequent implications for program efficiency and equity. Leveraging the staggered rollout of EBT across counties, I find that the transition to EBT led to a 9.6% decrease in the number of SNAP-authorized retailers, primarily driven by declines in the number of small SNAP stores. Evidence suggests that these exits among small stores were due to the initial costs associated with EBT setup. Further analyses indicate that, while EBT improved program efficiency by reducing administrative costs and increasing SNAP participation, these efficiency gains were largely concentrated in areas with relatively good access to large SNAP retailers.