Impact of Supplement Purchases on Food Stamp Recipient Food Expenditures

Helen Jensen, C. F. Chen, Y. Liu and Carol Olander

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: Will changing Food Stamp Program (FSP) policy to allow the purchase of vitamins and minerals affect recipients’ food expenditures? Existing data do not provide a definitive answer but suggest than any change in food expenditures is likely to be small. Analyses of survey data offer a look at the relationship between food and supplement expenditures but cannot establish the effect of a policy change on recipient behavior. The observed relationships are modest in magnitude and direction varies across different household types. We also pose a different question: to what extent are food stamp households now constrained from buying vitamins and minerals? Administrative data show that a large percentage of food stamp households receive less than the maximum allotment and are expected to use some of their cash resources for food. Similarly, the Consumer Expenditure Survey indicates a majority of recipients spend more than their benefit on food. Such patterns suggest that most households currently have resources which could be used for vitamin and mineral purchases. Data limitations make it difficult to quantify the effects of a policy change on food expenditures. The chapter concludes with a range of hypothetical illustrations of the potential effect of a FSP policy change. They are based on a set of plausible, but untested assumptions. These illustrations suggest that monthly reductions in food expenditures may be small, ranging from zero to less than a dollar per food stamp household. However, the impact for an individual household which actually uses food resources to buy supplements may be considerably greater.

Date: 1999-09-01
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Working Paper: Impact of Supplement Purchases on Food Stamp Recipient Food Expenditures (1999)
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