The Effect of SNAP and School Food Programs on Food Security,Diet Quality,and Food Spending: Sensitivity to Program Reporting Error

There is an extensive research literature on the effects of the Supplemental Nutrition Assistance Program (SNAP) on food‐related outcomes which has shown somewhat mixed results but generally favorable effects. However, most of the research has used data sets whose information on SNAP participation is gathered from responses on household surveys, and such responses are subject to reporting error. This study uses the National Household Food Acquisition and Purchase Survey data set to examine the effect of reporting error on food‐related outcomes, for that data set contains information on SNAP participation gathered from government administrative records. Our analysis shows that the degree of reporting error is small and has little effect on the estimated impact of participation in the SNAP program on food security, diet quality, and food spending. A supplemental analysis of the effect of school food programs likewise shows no difference in using survey or administrative data in the analysis.     

Investigating Treatment Effects of Participating Jointly in SNAP and WIC when the Treatment Is Validated Only for SNAP

The U.S. Department of Agriculture operates several food assistance programs aimed at alleviating food insecurity. We study whether participation in both participation in both SNAP and WIC alleviates food insecurity compared with participation in SNAP alone. We bound underlying causal effects by applying nonparametric treatment effect methods that allow for endogenous selection and underreported program participation when validation data are available for one program (treatment) but not the other. We estimate average treatment effects using data from the National Household Food Acquisition and Purchase Survey (FoodAPS). FoodAPS includes administrative data to validate SNAP participation. Information on local food prices allows us to construct a food expenditure‐based monotone instrumental variable that does not require a typical instrumental variable exclusion restriction. Under relatively weak monotonicity assumptions, we identify that the impact of participating in both programs relative to SNAP alone is strictly positive, suggesting that the programs are nonredundant. This evidence can support improved design and targeting of food programs.     

SNAP and Paycheck Cycles

It is well documented that individuals do not spend the Supplemental Nutrition Assistance Program (SNAP) benefits smoothly over the month after receipt. Rather, recipients spend a disproportionate share of benefits at the beginning of the benefit month. This has costs for recipients and stores. There is also evidence that other income streams, such as Social Security and paychecks, are not spent smoothly. The presence of these other income streams may bias estimates of the effects of this SNAP cycle on consumption for working SNAP beneficiaries and those who receive other government benefits. We use data from United States Department of Agriculture's National Household Food Acquisition and Purchase Survey to explore how the SNAP cycle is affected by accounting for these other income streams. We find suggestive evidence that the cycle is more pronounced for workers who are paid on a weekly or monthly basis, but little evidence that cycles in other income streams mitigate or exacerbate the SNAP cycle.     

Does School Lunch Fill the “SNAP Gap” at the End of the Month?

This article investigates the relationship between the timing of Supplemental Nutrition Assistance Program (SNAP) benefit payments and participation in school lunch and breakfast using the National Household Food Acquisition and Purchase Survey. An event study approach examines participation over the five‐day window before and after the SNAP payment. We find that school lunch participation decreases by 17–23 percentage points immediately after the SNAP payment among 11–18 year olds while breakfast drops by 19–36 percentage points. The decline begins the day prior to payment. We find no effects for 5–10 year olds. Models examining participation over the full SNAP month using individual fixed effects yield similar findings. Among teenagers, participation in school lunch and breakfast decline in the first two weeks of the SNAP month, increasing afterward. Non‐school meals show the opposite pattern. Overall, results indicate SNAP households rely more on school lunch and breakfast toward the end of the SNAP month.     

Rasch Analyses of Very Low Food Security among Households and Children in the Three City Study

The longitudinal Three City Study (TCS) of low‐income families with children measures food hardships using fewer and some different questions from the standard U.S. instrument, the Household Food Security Survey Module (HFSSM) in the Current Population Survey (CPS). We use a Rasch measurement model to identify thresholds of very low food security among households and among children in the TCS that are comparable to thresholds from the HFSSM. We also use the TCS to empirically investigate the determinants of food insecurity and of these specific food insecurity outcomes, estimating a multivariate behavioral Rasch model that is adapted to address longitudinal data. The estimation results indicate that participation in the Supplemental Nutrition Assistance Program and the Temporary Assistance for Needy Families program reduce food insecurity, while poverty and disability among caregivers increase it. Besides its longitudinal structure, the TCS measures many more characteristics about households than the CPS. Our estimates reveal that financial assistance through social networks and a household's own financial assets reduce food insecurity, while its outstanding loans increase insecurity.     

Food Price Crisis,Poverty, and Inequality

This paper simulates how a doubling of food prices affects absolute poverty and the food‐price‐adjusted real income distribution. We assume unsubsidized world food prices in order to derive the cost of poverty deepening and poverty expansion. We also estimate the degree to which inequality increases if no measures are put in place to offset rising food prices. Both measures are vulnerability indicators useful for social policy planning. Our results show that low‐income countries experience dramatic increases in absolute poverty as a result of doubling food prices. Middle‐income countries experience the greatest decrease in absolute income, which contributes most to an increase in world income inequality. The paper estimates that the global dollar value of the absolute poverty gap ($1.25/day) has the potential to increase by 400%, with poverty deepening accounting for two thirds of the increase.     

The Impact of SNAP on Material Hardships: Evidence From Broad‐Based Categorical Eligibility Expansions

This article examines whether expanding Supplemental Nutrition Assistance Program (SNAP) eligibility reduces material hardships of low‐income households. During the Great Recession, many states expanded the income threshold of eligibility for SNAP. I show that expansions in eligibility increased the SNAP participation rate by 3–5 percentage points. I also find that the expansion leads to a modest decrease in nonfood hardships, such as rent and utility delinquencies. However, the increase in SNAP enrollment does not lead to greater food spending or a reduction in food insecurity except for households with children.     

Health insurance generosity and conditional coverage: Evidence from medicaid managed care in Kentucky

This article estimates the impact of the introduction of Medicaid managed care (MMC) on the formal Medicaid participation of children. We employ a quasi‐experimental approach exploiting the location‐specific timing of MMC implementation in Kentucky. Using data from the March Current Population Survey from 1995 to 2003, our findings suggest that the introduction of MMC increases the likelihood of being uninsured and decreases formal Medicaid participation. This finding is consistent with an increase in “conditional coverage,” waiting until medical care is needed to sign up or re‐enroll in Medicaid. These effects are concentrated among low‐income children and absent for high‐income children. We find no evidence of “crowd‐in,” substituting private coverage for Medicaid. These results are robust to multiple placebo tests and imply the potential for less formal participation (i.e., more conditional coverage) among the Affordable Care Act‐Medicaid expansion population (which is likely to be primarily covered under MMC) than is typically predicted.     

Food Stamp Participation among Adult‐Only Households

Several recent changes in the Food Stamp Program have been directed toward households without children, including new work requirements for able‐bodied adults without dependents (ABAWDs) and easier application and recertification procedures for the disabled and the elderly. Despite their relevance to policy makers, adult‐only households have not been extensively examined. We use administrative records from South Carolina to investigate how spells of food stamp participation for adult‐only households vary with ABAWD provisions, recertification intervals, and other characteristics. We find that households that were subject to ABAWD policies had shorter spells and lower rates of food stamp participation than other households. We also find that households were much more likely to leave the Food Stamp Program at recertification dates than at other dates. We further find that time limits were associated with exits with and without earnings, suggesting that this policy increased self‐sufficiency for some households but left others without support.     

Misreporting of Government Transfers: How Important Are Survey Design and Geography?

Recent studies linking household surveys to administrative records reveal high rates of misreporting of program receipt. We use the FoodAPS survey to examine whether the findings of these studies of general household surveys using one or two states generalize to a survey with a narrow focus and across many states. First, we study how reporting errors differ from other surveys. We find a lower rate of false negatives (failures to report true receipt) in FoodAPS, likely partly due to the shorter recall period of FoodAPS. Misreporting varies with household characteristics and between interviewers. Second, we examine geographic heterogeneity in survey error to assess whether we can extrapolate from linked data from a few states. We find systematic differences between states in unconditional error rates but no evidence of substantial differences conditional on common covariates. Thus, extrapolating error rates across states may yield more accurate receipt estimates than uncorrected survey estimates.     

Beyond Income: What Else Predicts Very Low Food Security Among Children?

We examine characteristics and correlates of households in the United States that are most likely to have children at risk of inadequate nutrition—those that report very low food security (VLFS) among their children. Using 11 years of the Current Population Survey, plus data from the National Health and Nutrition Examination Survey (NHANES), we describe these households in great detail with the goal of trying to understand how these households differ from households without such severe food insecurity. While household income certainly plays an important role in determining VLFS among children, we find that even after flexibly controlling for income‐to‐poverty rates some household characteristics and patterns of program participation have important additional explanatory power. Finally, our examination of the NHANES data suggests an important role for both mental and physical health of adults in the household in determining the food security status of children.     

Uncertainty and Compensation Design in Strategic Interfirm Contracts

In strategic outsourcing contracts, a substantial portion of implementation occurs at the client's premises and requires integration of effort between the vendor and the client. Compensation design in such contracts involves trade-offs between the higher (lower) incentive properties of fixed-price (cost-plus) contracts and their higher (lower) ex ante contracting and ex post adaptation costs. Uncertainty influences these trade-offs and affects compensation design. We explore the compensation implications of two types of uncertainty—volatility and ambiguity—which are reflected in the client's accounting measures. Volatility reflects the unpredictability of changes in the future environment, which makes it difficult to contractually specify future contingencies. Ambiguity reflects lack of consensus about the nature, drivers, and value effects of uncertainty, which makes it difficult to contractually specify responses to contingencies if and when they occur. Volatility increases the likelihood of ex post adaptation costs, while ambiguity increases ex ante contracting costs; therefore, volatility and ambiguity decrease the attractiveness of fixed-price contracts. We use accounting and market measures to calibrate volatility and ambiguity and examine their implications for compensation design and ex post renegotiation. Analysis of archival data for 455 strategic outsourcing contracts valued over $15 million indicates that volatility and ambiguity influence contract compensation design and renegotiation likelihood. These results hold even after controlling for asset specificity, task complexity, and relational factors. We conclude that accounting measures can provide signals of volatility and ambiguity and thereby influence compensation design in strategic interfirm contracts.     

The Unintended Consequences of Education Policies on South African Participation and Unemployment

In the late 1990s, the South African Department of Education implemented two policies that were meant to reduce the large number of over‐aged learners in the school system: schools were no longer allowed to accept students who were more than two years older than the correct grade age, and students could not be held back more than once in each of four schooling phases. Our analysis uses school administrative data and household survey data to show that these policies coincided with a decrease in school enrolment of at least 400,000 and possibly more than 900,000 learners. These policies appear to have pushed many students into the labour market at earlier ages than was observed for previous generations, which explains much of the sudden increase in labour force participation and unemployment during this period. However, since these individuals would probably have entered the labour market sooner if not for their poor employment prospects, we argue that the resulting increase in unemployment signifies a more accurate reflection of disguised unemployment that already existed in the mid‐1990s rather than a deterioration of labour market conditions.     

Peer Networks and Tobacco Consumption in South Africa

This paper deepens the empirical analysis of peer networks by considering their effects on both smoking participation and smoking intensity in South Africa, a country where majority initiate smoking at adolescent age. Peer networks are key in determining the smoking behaviour of youths, but the magnitude of the effects is still debated, questioned and inconclusive. I used a control function approach, a two‐stage least square and the fixed effect method to address the potential endogeneity of peer network. The results suggest positive and significant peer effects on smoking participation and smoking intensity. While the network effects are consistently positive and significant, the magnitude of the estimates varies across methodological approaches with the instrument variable estimates generally lower. Including older adults in the peer reference group increases the peer effect estimates. Finally, using clusters as an alternative measure of network size in wave one, I show that peer effects are independent on network size but rather on network quality. Relative to the results of this paper, previous literature has documented larger peer effects on the decision to smoke. The findings suggest that policies (excise tax) that directly affect the decision to smoke and the smoking intensity of the peer reference group are likely to affect own smoking behaviour.     

Identifying the Effects of WIC on Food Insecurity Among Infants and Children

The Women, Infants, and Children (WIC) Program is considered a crucial component of the social safety net in the United States, yet there is limited supporting evidence on the effects of WIC on the nutritional well‐being and food security of infants and young children. Using data from the National Health and Nutrition Examination Survey, we apply recently developed partial identification methods to jointly account for unobserved counterfactual outcomes and systematic underreporting of WIC participation. Under nonparametric assumptions, we find that WIC reduces the prevalence of child food insecurity by at least 3.6 percentage points (20%).     

IMPLEMENTING A ROBUST RISK MODEL FOR SOUTH AFRICAN EQUITY MARKETS: A PEAK‐OVER‐THRESHOLD APPROACH

This paper implements a market risk model for the South African equity market using daily returns of the Johannesburg Stock Exchange All Share Index. Firstly, we separate positive returns from negative returns and model them using the peak‐over‐threshold (POT) method in order to compute the downside as well as upside risk measures separately. We thereafter compute the value‐at‐risk (VAR) and the expected shortfall (ES) estimates corresponding to upside and downside risks. We bootstrap these risk measures and compute their standard errors and confidence intervals (CIs) to see whether they fall inside these CIs. Secondly, we compute out‐sample forecasts of VAR estimates using the POT method and the generalised autogressive conditional heteroscedasticity process. Three backtesting methodologies are employed: the unconditional and conditional coverage tests and the counting of number of exceptions according to Basel II green zone. We find that all our VAR and ES estimates are well inside their CIs and that at lower quantiles, parametric ES estimates are equal to POT‐ES estimates, although the difference between the two is more pronounced at higher quantiles (99% or higher). Furthermore, our market risk model falls into the Basel II green zone, as it produces fewer exceptions in out‐sample space.     

Food Access,Program Participation,and Health: Research Using FoodAPS

This piece is an introduction to the symposium on Food Access, Program Participation, and Health: Research using FoodAPS. The symposium includes articles presented at the National Bureau of Economic Research Conference on Food Security on December 7 and 8, 2017. The research herein was supported by the Economic Research Service of the U.S. Department of Agriculture, grant number 59‐5000‐5‐0115. The grant included funding to study the effects of various food assistance programs on outcomes, using data from the National Household Food Acquisition and Purchase Survey (FoodAPS). We describe the programs and the FoodAPS data, and point out highlights from the articles.     

WIC Participation and Relative Quality of Household Food Purchases: Evidence from FoodAPS

We examine the effect of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) on the quality of household food purchases using the National Household Food Acquisition and Purchase Survey (FoodAPS) and propensity score matching. A healthy purchasing index (HPI) is used to measure nutritional quality of household food purchases. WIC foods explain the improvement in quality of food purchases, not self‐selection of more nutrition‐conscious households into the program. The improvement in purchase quality was driven entirely by WIC participating households who redeemed WIC foods during the interview week. There was no significant difference between WIC participants who did not redeem WIC foods and eligible nonparticipants. In this sample, there is no evidence that lack of access to clinics has adverse effects on participation nor is there evidence that HPI depends on supermarket access. A supervised machine learning process supports our main conclusion on the importance of WIC foods.     

Disclosure Policy and Market Liquidity: Impact of Depth Quotes and Order Sizes*

This paper investigates the relation between disclosure policy and market liquidity. Our tests examine two key aspects of market liquidity, the effective bid‐ask spread and quoted depth, and how they relate to financial analysts' ratings of firms' disclosure policies. We introduce a method of combining order sizes and depth quotes to yield more precise estimates of effective spreads on trades likely constrained by quoted depth. We find that while firms with higher rated disclosures are charged lower effective spreads, they are also quoted lower depth, consistent with the notion that better disclosures reduce information asymmetry but also cause some liquidity suppliers to exit the market. Therefore, a simple examination of spreads and depths yields ambiguous inferences on the relation between disclosure policy and market liquidity. We resolve this ambiguity by estimating depth‐adjusted effective spreads, and find that firms with higher rated disclosures have lower depth‐adjusted effective spreads across all trade sizes. Consequently, our results reveal a robust inverse relation between disclosure ratings and effective trading costs. This implies that a policy of enhanced financial disclosure is related to improved market liquidity.