The Effect of Food Stamps and Income on Household Food Expenditures
This report, reexamining past estimates of tile effect of income and food stamp benefits on food expenditures, finds that a cash-only Food Stamp Program would result in a significant reduction in food expenditures, although smaller than suggested, by some previous results. Most prior studies found spending on food from marginal food stamp benefits to be several times greater than from marginal income, suggesting that cashing out the Food Stamp Program could greatly reduce food expenditures. The present study finds a 10-cent reduction in food spending for each dollar of food stamp benefits converted to a cash payment. Previous specifications of the-food expenditure equation plus one based on the translog specification are estimated using data·from the 1979-80 Nationwide Food Consumption Survey, Low Income Sample. In contrast to prior studies, the structural relationship of food stamp benefits to income is explicitly modeled. The report demonstrates that the functional form of the food expenditure equation was important in obtaining results previously reported.
|Date of creation:||Jul 1991|
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- Robert E. Hall & Frederic S. Mishkin, 1980.
"The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households,"
NBER Working Papers
0505, National Bureau of Economic Research, Inc.
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- 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.
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- Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
- Smallwood, David M. & Blaylock, James R., 1985. "Analysis Of Food Stamp Program Participation And Food Expenditures," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 10(01), July.
- Mittelhammer, Ron & West, Donald A., 1975. "Food Stamp Participation Among Low-Income Households: Theoretical Considerations of the Impact on the Demand for Food," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 7(01), pages 223-231, July.
- 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.
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