Food Stamps, Food Insufficiency, and Health of the Elderly

A primary goal of the Food Stamp Program (FSP), the universal nation-wide welfare program for the poor and near poor, is to improve the well-being of elderly Americans. The overarching objective of this study is to determine whether and how elderly health status is affected by FSP participation, food insufficiency and other determinants. To carry out this goal, we first construct a theoretical framework to ascertain why so few eligible elderly households participate in the FSP, and how food intake affects health status. In addition, the model examines the main determinants of food insufficiency and how FSP participation and food insufficiency are linked to each other and then to health status. The data utilized in this study are a subset of the Health and Retirement Survey (HRS) from the year 2002. State-specific FSP criteria are used to determine the eligibility of elderly households in the sample. The method used to examine these linkages is a two-step econometric model. In the first step, a simultaneous multivariate Probit model of endogenous FSP participation and food insufficiency equations is estimated. Based on these results, we calculate predicted probabilities of FSP participation and food insufficiency for use in Step Two. In Step Two, an Ordered Probit of health status is estimated as a function of the predicted FSP participation and predicted food insecurity, controlling for other determinants of health status. The estimating procedure extends the Murphy and Topel’s (1985) standard error correction method to the case of two predicted explanatory variables. After correcting the standard errors, some coefficients lose their significance indicating the importance of the standard error correction procedure. Specifically, the coefficient of the probability of FSP participation on elderly health switches from being statistically significant to insignificant after the correction. Conversely, even with the correction, being food insufficient significantly worsen health status. The results suggest that FSP net benefits, though increasing food purchasing power, are inadequate to help elderly to achieve the minimum threshold of food intake that could significantly improve health status.