The Food Stamp Program and Food Insufficiency

Craig Gundersen and Victor Oliveira

Elsewhere No. (0202), January 2002

Food stamp participants have higher food insufficiency rates than eligible non-participants, even after controlling for other factors. Given the Food Stamp Program's prominent role in the alleviation of hunger, this is a counterintuitive result. We conjecture that these higher rates are due to adverse selection insofar as households more likely to be food insufficient are also more likely to receive food stamps. We establish a theoretical framework to address this adverse selection. Using a simultaneous equation model with two probits, we show that once one controls for this adverse selection, food stamp recipients have the same probability of food insufficiency as non-recipients.

Keywords: food security, food insufficiency, food stamps, simultaneous equation models, Survey of Income and Program Participation (SIPP), adverse selection

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Updated date: January 2002