San Diego just joined the LA area in allowing some recipients of food stamps to use their funds at restaurants.
The eligible recipients are the homeless, elderly, and disabled who may lack adequate kitchen facilities or the ability to prepare foods. Not surprisingly the list of restaurants taking food stamps includes famous fast food places like Pizza Hut, Subway, and KFC. The good news is it also includes El Pollo Loco, which I thought was pretty tasty the one time I was in LA.
However, it is unclear if the new program is a good use of resources. From the San Diego article one supporter of the proposal says
"This would be no different than going to the supermarket, which has healthy and not so healthy choices," he said. "I hope people understand that and hope they make healthy choices.
I tend to agree with this statement, my guess is that the nutrition from purchases at supermarket probably isn't that different from the restaurants. In welfare programs like food stamps we limit recipients choices (for example they can't buy alcohol with the funds).
Intermediate micro theory assumes a rational person and shows in short with cash recipients could purchase the same food or something they like better, so cash is the better option. It may be worth realizing though we aren't maximizing the happiness of the recipient, but a combination of the recipient and the tax payer who might have different preferences.