Food Stamps and the Market Demand for Food

Albert Reed and J. William Levedahl

American Journal of Agricultural Economics, 2010, vol. 92, issue 5, 1392-1400

Abstract: This article compares estimates of disaggregated market food demand responses to the Supplemental Nutrition Assistance Program benefits based on exact nonlinear aggregation to responses based on linear aggregation. By accounting for income inequality, nonlinear aggregation implies that only the households that receive benefits contribute to market demand responses. In contrast, linear aggregation presumes all households receive benefits and thus contribute to the market demand response. The consequence is that nonlinear market estimates are smaller than the linear estimates by roughly the fraction of households that receive benefits. Copyright 2010, Oxford University Press.

Date: 2010
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