The Evaluation of the Alabama Food Stamp Cash-Out Demonstration

A fundamental issue in the design of the Food Stamp Program (FSP) is the form benefits should take. Advocates of the current coupon system argue that coupons are a direct and inexpensive way to ensure that food stamp benefits are used to purchase food; that, despite some evidence of fraud and benefit diversion under the current system, the unauthorized use of food stamps is relatively limited; and that coupons provide some measure of protection to food budgets from other demands on limited household resources. Advocates of replacing coupons with cash argue that the current system limits the food purchasing choices of participants, places a stigma on participation; and entails excessive costs for coupon issuance, transaction, and redemption.