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Explaining The Food Stamp Cash-Out Puzzle

  • Breunig, Robert
  • Dasgupta, Indraneel
  • Gundersen, Craig
  • Pattanaik, Prasanta

Empirical studies have shown that food stamp participants spend a higher proportion of their benefit on food than they would with an equivalent amount of cash. Our study demonstrates that this result can be explained by the decision-making behavior of multi-adult households. Multi-adult households spend a higher proportion of their food stamp benefit than they would with an equivalent amount of cash. In contrast, single-adult households show little difference in food spending between food stamps and an equivalent amount of cash. Because over 30 percent of food stamp participants are in multi-adult households, switching from food stamps to cash may reduce food purchases of these needy households. If that is indeed the case, the use of food stamps and other in-kind benefits may be more desirable than other forms of assistance.

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File URL: http://purl.umn.edu/33869
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Paper provided by United States Department of Agriculture, Economic Research Service in its series Food Assistance and Nutrition Research Reports with number 33869.

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Date of creation: 2001
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Handle: RePEc:ags:uersfa:33869
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  1. J. S. Butler & James C. Ohls & Barbara Posner, 1985. "The Effect of the Food Stamp Program on the Nutrient Intake of the Eligible Elderly," Journal of Human Resources, University of Wisconsin Press, vol. 20(3), pages 405-420.
  2. Hardle, W., 1992. "Applied Nonparametric Methods," Papers 9206, Tilburg - Center for Economic Research.
  3. Dasgupta, Indraneel, 2001. "Gender-biased redistribution and intra-household distribution," European Economic Review, Elsevier, vol. 45(9), pages 1711-1722, October.
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  5. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September.
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  9. Alderman, Harold, et al, 1995. "Unitary versus Collective Models of the Household: Is It Time to Shift the Burden of Proof?," World Bank Research Observer, World Bank Group, vol. 10(1), pages 1-19, February.
  10. Parke E. Wilde & Christine K. Ranney, 2000. "The Monthly Food Stamp Cycle: Shooping Frequency and Food Intake Decisions in an Endogenous Switching Regression Framework," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 200-213.
  11. Barbara Devaney & Thomas Fraker, 1986. "Cashing out food stamps: Impacts on food expenditures and diet quality," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 5(4), pages 725-741.
  12. Moffitt, Robert, 1989. "Estimating the Value of an In-Kind Transfer: The Case of Food Stamps," Econometrica, Econometric Society, vol. 57(2), pages 385-409, March.
  13. repec:mpr:mprres:1253 is not listed on IDEAS
  14. Wilde, Parke E. & Ranney, Christine K., 1996. "The Distinct Impact Of Food Stamps On Food Spending," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(01), July.
  15. Oliver LINTON, . "Applied nonparametric methods," Statistic und Oekonometrie 9312, Humboldt Universitaet Berlin.
  16. Alderman, H. & Chiappori, P.A. & Haddad, L., 1994. "Unitary versus Collective Models of the Household: Time to Shift the Burden of Proof?," DELTA Working Papers 94-17, DELTA (Ecole normale supérieure).
  17. Thomas M. Fraker & Alberto P. Martini & James C. Ohls, 1995. "The Effect of Food Stamp Cashout on Food Expenditures: An Assessment of the Findings from Four Demonstrations," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 633-649.
  18. Haddad, Lawrence & Hoddinott, John & Alderman, Harold & DEC, 1994. "Intrahousehold resource allocation : an overview," Policy Research Working Paper Series 1255, The World Bank.
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