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Tracing The Impacts Of Food Assistance Programs On Agriculture And Consumers: A Computable General Equilibrium Model

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  • Hanson, Kenneth
  • Golan, Elise H.
  • Vogel, Stephen J.
  • Olmsted, Jennifer

Abstract

Changes in food assistance policy can have impacts on economic activity and household income across the economy. Using a Computable General Equilibrium model focusing on food assistance, we found that both a hypothetical cut in food stamp benefits and a hypothetical cash-out of the Food Stamp Program led to reductions in food demand and farm production. In addition, this hypothetical cut in food stamp benefits resulted in a decline in transfer income for low-income households that was not compensated for by increased labor income. The cash-out triggered general equilibrium effects that led to higher taxes and reductions in labor income, chiefly for high-income households. The Food Assistance Computable General Equilibrium model includes modeling innovations that make it particularly useful for investigating the potential economic impact of changes in food assistance policy. These innovations include allowing household consumption patterns to vary by income and food stamp benefits, letting labor supply and demand vary by skill level and occupation, and using considerable industry detail for key agricultural and food processing sectors.

Suggested Citation

  • Hanson, Kenneth & Golan, Elise H. & Vogel, Stephen J. & Olmsted, Jennifer, 2002. "Tracing The Impacts Of Food Assistance Programs On Agriculture And Consumers: A Computable General Equilibrium Model," Food Assistance and Nutrition Research Reports 33831, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersfa:33831
    DOI: 10.22004/ag.econ.33831
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    Cited by:

    1. Pender, John & Jo, Young & Miller, Cristina, 2015. "Economic Impacts of Supplemental Nutrition Assistance Program Payments in Nonmetro vs. Metro Counties," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205626, Agricultural and Applied Economics Association.
    2. Paul A. Lewin & Bruce A. Weber, 2020. "Distributional impacts of food assistance: How SNAP payments to the rural poor affect incomes in the urban core," Papers in Regional Science, Wiley Blackwell, vol. 99(5), pages 1281-1300, October.
    3. Reimer, Jeffrey J. & Weerasooriya, Senal & West, Tyler T., 2015. "How Does the Supplemental Nutrition Assistance Program Affect the U.S. Economy?," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 44(3), pages 1-20, December.
    4. repec:ags:afjare:225656 is not listed on IDEAS
    5. Vogel, Stephen & Miller, Cristina & Ralston, Katherine, 2021. "Impact of USDA's Supplemental Nutrition Assistance Program (SNAP) on Rural and Urban Economies in the Aftermath of the Great Recession," USDA Miscellaneous 314934, United States Department of Agriculture.
    6. Gavrel, Frédéric & Lebon, Isabelle & Rebière, Thérèse, 2010. "Layoff taxes and minimum wage: Two complementary public policies," Economics Letters, Elsevier, vol. 107(1), pages 30-32, April.
    7. Hanson, Kenneth & Somwaru, Agapi, 2003. "Distributional Effects Of U.S. Farm Commodity Programs: Accounting For Farm And Non-Farm Households," 2003 Annual meeting, July 27-30, Montreal, Canada 21944, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Weerasooriya, Senal A. & Reimer, Jeffrey J., 2016. "Effects of the Supplemental Nutrition Assistance Program on Rural and Urban Areas in Oregon," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235751, Agricultural and Applied Economics Association.
    9. West, Tyler T. & Reimer, Jeffrey J., 2013. "Household and Intersectoral Effects of Reduced SNAP Expenditures: A Computable General Equilibrium Analysis," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150410, Agricultural and Applied Economics Association.

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