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The Effect of Food Stamps and Income on Household Food Expenditures


  • Levedahl, J. William


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.

Suggested Citation

  • Levedahl, J. William, 1991. "The Effect of Food Stamps and Income on Household Food Expenditures," Technical Bulletins 157026, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uerstb:157026

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    References listed on IDEAS

    1. 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.
    2. Benus, J & Kmenta, J & Shapiro, Harold T, 1976. "The Dynamics of Household Budget Allocation to Food Expenditures," The Review of Economics and Statistics, MIT Press, vol. 58(2), pages 129-138, May.
    3. 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.
    4. Hall, Robert E & Mishkin, Frederic S, 1982. "The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households," Econometrica, Econometric Society, vol. 50(2), pages 461-481, March.
    5. 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(01), July.
    6. 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.
    7. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
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    Cited by:

    1. Hamilton, William L. & Rossi, Peter H., 2002. "Effects Of Food Assistance And Nutrition Programs On Nutrition And Health, Volume 1, Research Design," Food Assistance and Nutrition Research Reports 33805, United States Department of Agriculture, Economic Research Service.
    2. Gentilini,Ugo, 2016. "The revival of the"cash versus food"debate : new evidence for an old quandary ?," Policy Research Working Paper Series 7584, The World Bank.
    3. Chad D. Meyerhoefer & Muzhe Yang, 2011. "The Relationship between Food Assistance and Health: A Review of the Literature and Empirical Strategies for Identifying Program Effects," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(3), pages 304-344.
    4. Diane Gibson, 2000. "Poverty, Food Stamp Program Participation, and Health: Estimates from the NLSY97," JCPR Working Papers 163, Northwestern University/University of Chicago Joint Center for Poverty Research.
    5. Nicholas, Lauren Hersch, 2011. "Can Food Stamps help to reduce Medicare spending on diabetes?," Economics & Human Biology, Elsevier, vol. 9(1), pages 1-13, January.
    6. Gentilini, Ugo, 2014. "Our daily bread : what is the evidence on comparing cash versus food transfers?," Social Protection and Labor Policy and Technical Notes 89502, The World Bank.


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