The Effect of Food Stamps on Food Security: A Panel Data Approach*

Abstract

This research seeks to estimate the effect of Food Stamp Program (FSP) participation on security. The FSP is the U.S. Federal Government's largest intervention against hunger and insecurity. In fiscal year 2002, the program provided more benefits ($18 billion) and served more people on average each month (19.1 million) than the federal cash assistance program, Temporary Assistance for Needy Families. The federal government classifies a household as food secure if all household members have, at all times, access to enough for an active, healthy life. Official security estimates are based on eighteen survey items about symptoms of hardship in the past twelve months. Increasing security is an official FSP goal and a centerpiece of stamp policy debate. Yet, measuring the program's impact on security has proven difficult. Unobserved factors may influence measured security and the FSP participation decision. The potential problem of selection bias is stark. This research for the first time exploits the longitudinal structure of the federal government's flagship security survey to control for household-level fixed effects-constant unobserved factors that may influence both program participation and measured security. For example, if some households are simply more susceptible to hardships, they may be more likely to participate in the FSP and to be classified as food insecure. This research also controls for observable time-varying household conditions, such as the number of employed persons in the household and a rough measure of income. The empirical model does not control for unobserved factors that are time-varying,