The Food Assistance National Input-Output Multiplier (FANIOM) Model and Stimulus Effects of SNAP

Economic Research Report No. (ERR-103) 50 pp, October 2010

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by Kenneth Hanson

USDA's Economic Research Service uses the Food Assistance National Input-Output Multiplier (FANIOM) model to represent and measure linkages between USDA's domestic food assistance programs, agriculture, and the U.S. economy. This report describes the data sources and the underlying assumptions and structure of the FANIOM model and illustrates its use to estimate the multiplier effects from benefits issued under the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program). During an economic downturn, an increase in SNAP benefits provides a fiscal stimulus to the economy through a multiplier process. The report also examines the different types of multipliers for different economic variables that are estimated by input-output multiplier and macroeconomic models and considers alternative estimates of the jobs impact. FANIOM's GDP multiplier of 1.79 for SNAP benefits is comparable with multipliers from some macroeconomic models.

Keywords: Automatic Stabilizer, fiscal stimulus, multipliers, jobs impact, Input-Output Multiplier Model, Social Accounting Matrix (SAM) multiplier model, Supplemental Nutrition Assistance Program (SNAP), Food Stamp Program

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