Choice by Design: Evidence from Feeding America’s Food Allocation Problem

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Feeding America, an organisation responsible for feeding 130,000 Americans every day, distributes food among a nationwide network of food banks. Their allocation mechanism, known as the ‘Choice System’, uses auctions and a virtual currency to give food banks choice over the food they receive. This paper examines the consequences of enabling this choice. I apply a dynamic auction model to food bank bidding data, estimating the distribution of food banks’ heterogeneous and time-varying needs. The central challenge is that I do not observe food banks’ inventories — a key determinant of bidding behaviour. I overcome this difficulty using variation in food banks’ winnings (observed shifters of these unobserved stocks) to identify the model, which I estimate using a Gibbs Sampler. I then compare welfare under the Choice System to Feeding America’s previous allocation mechanism which gave food banks very limited choice. I estimate that the Choice System increased welfare by the equivalent of increasing the supply of donated food by around a third. Most of this gain arises because food is allocated in batches, rather than sequentially.