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The Effect Of Functional Form On The Estimated Marginal Propensities To Spend Out Of Food Stamps And Money Income And The Implications For A Cash-Only Food Stamp Program

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  • Levedahl, J. William

Abstract

Using linear in the coefficients specifications (LCS), previous estimates of the marginal propensity to spend on food out of food stamps are about 4 to 5 times the MPS out of income. This magnitude implies that food expenditures would fall drastically if the program was cashed-out. The LCS and a specification of the expenditure equation based on a generalization of Roy's identity and a translog indirect utility function are estimated. The implications of these functional forms on cashing-out the Food Stamp Program are discussed.

Suggested Citation

  • Levedahl, J. William, 1990. "The Effect Of Functional Form On The Estimated Marginal Propensities To Spend Out Of Food Stamps And Money Income And The Implications For A Cash-Only Food Stamp Program," 1990 Annual meeting, August 5-8, Vancouver, Canada 270908, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea90:270908
    DOI: 10.22004/ag.econ.270908
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    References listed on IDEAS

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    1. Neenan, Pamela H. & Davis, Carlton George, 1977. "Impact Of The Food Stamp Program On Low Income Household Food Consumption In Rural Florida," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 9(2), pages 1-9, December.
    2. Chavas, Jean-Paul & Yeung, M. L., 1982. "Effects of the Food Stamp Program on Food Consumption in the Southern United States," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 14(1), pages 131-139, July.
    3. Huang, Chung L. & Fletcher, Stanley M. & Raunikar, Robert, 1981. "Modeling The Effects Of The Food Stamp Program On Participating Households' Purchases: An Empirical Application," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 13(2), pages 1-8, December.
    4. Huang, Chung L. & Fletcher, Stanley M. & Raunikar, Robert, 1981. "Modeling the Effects of the Food Stamp Program on Participating Households' Purchases: An Empirical Application," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 13(2), pages 21-28, December.
    5. Neenan, Pamela H. & Davis, Carlton G., 1977. "Impact of the Food Stamp Program on Low Income Household Food Consumption in Rural Florida," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 9(2), pages 89-97, December.
    6. Herman M. Southworth, 1945. "The Economics of Public Measures to Subsidize Food Consumption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(1), pages 38-66.
    7. Olsen, Edgar O, 1971. "Some Theorems in the Theory of Efficient Transfers," Journal of Political Economy, University of Chicago Press, vol. 79(1), pages 166-176, Jan.-Feb..
    8. Donald A. West & David W. Price, 1976. "The Effects of Income, Assets, Food Programs, and Household Size on Food Consumption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(4_Part_1), pages 725-730.
    9. Ben Senauer & Nathan Young, 1986. "The Impact of Food Stamps on Food Expenditures: Rejection of the Traditional Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 37-43.
    10. Mittelhammer, Ronald C. & West, Donald A., 1975. "Food Stamp Participation Among Low-Income Households: Theoretical Considerations Of The Impact On The Demand For Food," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 7(1), pages 1-9, July.
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