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It's a Cruel Summer: Household Responses to Reductions in Government Nutrition Assistance

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  • Lorenzo Almada
  • Ian McCarthy

Abstract

The appropriate size and scope of government nutrition assistance programs is a regular source of debate among policy-makers, and with calls to reduce government benefits, a clear understanding of household responses to any proposed benefit reduction is critical. Exploiting the design of U.S. nutrition assistance programs, we examine how low-income households reallocate their budgets following an exogenous reduction in nutrition assistance benefits. The magnitude of our results suggests that the budget for an average low-income household with children is severely inflexible and likely unable to absorb more than a $2 to $3 reduction in nutrition benefits per child per week.

Suggested Citation

  • Lorenzo Almada & Ian McCarthy, 2017. "It's a Cruel Summer: Household Responses to Reductions in Government Nutrition Assistance," NBER Working Papers 23633, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23633 Note: HE PE
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    References listed on IDEAS

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    1. Lorenzo Almada & Ian McCarthy & Rusty Tchernis, 2016. "What Can We Learn about the Effects of Food Stamps on Obesity in the Presence of Misreporting?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(4), pages 997-1017.
    2. Gundersen, Craig & Kreider, Brent & Pepper, John, 2012. "The impact of the National School Lunch Program on child health: A nonparametric bounds analysis," Journal of Econometrics, Elsevier, vol. 166(1), pages 79-91.
    3. Daniel L. Millimet & Rusty Tchernis & Muna Husain, 2010. "School Nutrition Programs and the Incidence of Childhood Obesity," Journal of Human Resources, University of Wisconsin Press, vol. 45(3).
    4. Timothy K.M. Beatty & Charlotte J. Tuttle, 2015. "Expenditure Response to Increases in In-Kind Transfers: Evidence from the Supplemental Nutrition Assistance Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(2), pages 390-404.
    5. Barrow, Lisa & McGranahan, Leslie, 2000. "The Effects of the Earned Income Credit on the Seasonality of Household Expenditures," National Tax Journal, National Tax Association, vol. 53(4), pages 1211-1244, December.
    6. Vassilopoulos, Achilleas & Drichoutis, Andreas & Nayga, Rodolfo & Lazaridis, Panagiotis, 2011. "Does the Food Stamp Program Really Increase Obesity? The Importance of Accounting for Misclassification Errors," MPRA Paper 28768, University Library of Munich, Germany.
    7. Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
    8. John Mullahy, 2011. "Marginal Effects in Multivariate Probit and Kindred Discrete and Count Outcome Models, with Applications in Health Economics," NBER Working Papers 17588, National Bureau of Economic Research, Inc.
    9. Barrow, Lisa & McGranahan, Leslie, 2000. "The Effects of the Earned Income Credit on the Seasonality of Household Expenditures," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1211-44, December.
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    More about this item

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D1 - Microeconomics - - Household Behavior
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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