ANALYSIS OF FOOD STAMP PROGRAM PARTICIPATION AND FOOD EXPENDITURES

A two equation model is developed to examine jointly the determinants of household food stamp program participation and program effects on food expenditures. The model is unique in that it postulates that the participation decision is based on a cost-benefit ratio, selected socioeconomic characteristics, and the potential for increasing both food and nonfood expenditures. Data from the 1977-78 USDA Nationwide Food Consumption Survey Supplemental Low Income Sample is used to estimate the model. Findings suggest that households, in making the participation decision place equal value on the potential for increasing their food and nonfood expenditures. However, at the margin, bonus stamp income is found to have more than twice the impact of money income on food expenditures. The model's potential for policy analysis is also examined.Food Consumption/Nutrition/Food Safety,

BOX-COX TRANSFORMATIONS AND ERROR TERM SPECIFICATION IN DEMAND MODELS

This paper analyzes the influence of error-term specification and functional form on a quarterly demand model for beef. The Box-Cox transformation is used to generalize the functional form while the equation error term is postulated to be both heteroskedastic and autoregressive. Results indicated that both functional form and error-term specification can play a major role in elasticity estimation, elasticity behavior, and hypothesis testing.Demand and Price Analysis,

AN ALTERNATIVE APPROACH TO DEFINING AND ASSESSING POVERTY THRESHOLDS

This paper introduces a new method for defining poverty lines based on an individual' s self-evaluation of the household's present situation. The proposed method focuses on the minimum household income necessary to purchase food supplies evaluated by society to be barely adequate. The method is especially useful for evaluation and comparing poverty thresholds derived from different methods. It is also valuable for comparing the official U.S. poverty guidelines across households of different sizes. The approach can be extended to include estimation of thresholds differentiated by various household characteristics and comparison of thresholds across these characteristics.Food Security and Poverty,

Rising Infant Formula Costs to the WIC Program: Recent Trends in Rebates and Wholesale Prices

The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides participating infants with free infant formula. This study estimated that between 57 and 68 percent of all infant formula sold in the United States was purchased through WIC, based on 2004-06 data, and that formula costs to the WIC program have increased. Typically, WIC State agencies receive substantial rebates from manufacturers for each can of formula provided through the program. Each WIC State agency, or group of agencies, awards a contract to the manufacturer offering the lowest net wholesale price, defined as the difference between the manufacturer’s wholesale price and the State agency’s rebate. After adjusting for inflation, net wholesale prices increased by an average 73 percent for 26 fluid ounces of reconstituted formula between States’ contracts in effect in December 2008 and the States’ previous contracts. Most (72 percent) of the increase in real net wholesale prices was due to higher wholesale prices, the rest (28 percent) was due to lower rebates. As a result of the increase in real net wholesale prices, WIC paid about $127 million more for infant formula over the course of a year.Infant formula, Special Supplemental Nutrition Program for Women, Infants and Children, WIC, infant formula maximum daily allowance, Economic Research Service (ERS), U.S. Department of Agriculture (USDA), Agricultural and Food Policy,

INFORMATIONAL EFFECTS OF NUTRIENT INTAKE DETERMINANTS ON CHOLESTEROL CONSUMPTION

Nutrient information and dietary data for a sample of U.S. household meal planners are used to estimate the direct and indirect effects of various dietary determinants on cholesterol intake. Holding sociodemographic and household characteristics constant, greater nutrition information translates to significantly lower intake of dietary cholesterol. Evidence supports the hypothesis that schooling promotes better health behavior through greater acquisition and use of health information. Blacks and Hispanics stand to benefit from nutrition education programs to increase their awareness of diet-health relationship. A low-calorie diet decreases the intake of cholesterol more than a low-fat diet.Food Consumption/Nutrition/Food Safety,

WIC AND THE RETAIL PRICE OF INFANT FORMULA

Rebates from infant formula manufacturers to State agencies that administer the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) support over one-quarter of all WIC participants. However, concerns have been raised that WIC and its infant formula rebate program may significantly affect the infant formula prices faced by non-WIC consumers. This report presents findings from the most comprehensive national study of infant formula prices at the retail level. For a given set of wholesale prices, WIC and its infant formula rebate program resulted in modest increases in the supermarket price of infant formula, especially in States with a high percentage of WIC formula-fed infants. However, lower priced infant formulas are available to non-WIC consumers in most areas of the country, and the number of these lower priced alternatives is increasing over time.WIC program, infant formula, cost-containment, rebates, food package costs, Special Supplemental Nutrition Program for Women, Infants, and Children, child nutrition, food assistance, Food Security and Poverty,

ECONOMIC INCENTIVES FOR DIETARY IMPROVEMENT AMONG FOOD STAMP RECIPIENTS

Most Americans need to consume more fruits, vegetables, and dairy products. This need is particularly acute among low-income individuals. The objective of this study is to examine the cost effectiveness of two economic policies that use alternative policy levers available within the Supplemental Nutrition Assistance Program (formerly Food Stamp Program) to increase consumption of these under-consumed foods. Data from three nationally representative surveys are used to estimate demand elasticities, marginal propensity to spend on food out of food stamp benefits, and consumption amount of and spending on under-consumed foods among food stamp recipients. Results of the analyses suggest that a 10% price subsidy would curtail consumption deficiencies by 4–7% at an estimated cost of $734 million a year. When the same$734 million is used to finance food stamp benefits, consumption deficiencies are predicted to narrow by only 0.35 to 0.40%.CEX, SNAP, Price subsidy, NHANES, NFSPS, Vegetables, Milk, Fruits, Food stamps, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, C34, D12, Q18,

USDA's Healthy Eating Index and Nutrition Information

A comprehensive model is developed to measure the extent that nutrition knowledge and diet-health awareness, among other factors, influence an individual's Healthy Eating Index (HEI), USDA's measure of overall diet quality. This is the first study that rigorously attempts to examine variation in the index across population groups by controlling for personal and household characteristics and nutrition information levels, as well as test for the endogeneity of nutrition information. Results indicate that one's level of nutrition information has an important influence on one's HEI and that nutrition information and the HEI are simultaneously determined. Other factors explaining variations in HEI's across individuals are income and education levels, race, ethnicity, and age. Evidence supports the hypothesis that higher education promotes more healthful food choices through better acquisition and use of health information.diet quality, Healthy Eating Index, nutrient demand, nutrition knowledge, health inputs, health production, Food Consumption/Nutrition/Food Safety,

Can Food Stamps Do More to Improve Food Choices? An Economic Perspective

Food stamp recipients, like other Americans, struggle with nutrition problems associated with choice of foods, as well as amounts. This series of Economic Information Bulletins compiles evidence to help answer the question of whether the Food Stamp Program can do more to improve the food choices of participants. It examines the role of affordability and price of healthful foods in influencing food choices and the likely success of any policy targeted at changing food choices through food stamp bonuses or restrictions. It also examines other approaches to changing food choices, including nutrition education and potential strategies drawn from behavioral economics literature. Meaningful improvements in the diets of food stamp recipients will likely depend on a combination of many tactics. Measuring the effect of any policy change on food choices and health outcomes remains a challenge.Food Stamp Program, food consumption, food prices, food expenditures, nutrition education, behavioral economics, food choices, diet, health, fruits and vegetables, Food Assistance and Nutrition Research Program, FANRP, ERS, USDA, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics,