Does Participation in the Food Stamp Program Affect the Incidence of Obesity and Health Care Costs?
- Presenter:
Chair: Tom Selden; Discussant: TBA Tue June 6, 2006 13:45-15:15 Room 226
The Food Stamp Program (FSP) is a cornerstone of public assistance and poverty alleviation efforts in the United States, serving nearly 24 million individuals at a cost in excess of 25 billion dollars in 2004. Though the program plays an important role in alleviating hunger by supplementing food budgets and freeing income for non-food purchases, some have raised concerns that it may be contributing to the high incidence of overweight and obesity among the poor. Furthermore, many FSP participants are Medicaid recipients, so higher rates of obesity due to program participation may result in greater financial burden on public insurance programs if obesity-attributable medical expenditures increase. Several studies have shown that participation in the FSP leads to higher food expenditures and a greater marginal propensity to consume food out of program benefits than out of cash income (Fraker, 1990). However, higher expenditures on food do not necessarily translate into greater caloric intake. For example, a recent study by Mathematica Policy Research (2000) finds inconsistent and insignificant effects of program participation on the number of servings consumed, level of micronutrient intake, and indices of overall dietary quality for adults. Both Gibson (2002) and Chen et al. (2005) find that participation in the FSP is associated with higher rates of obesity for woman, but neither of these studies provides rigorous identification of the link between program participation and obesity.
We investigate the impact of participation in the FSP on adult obesity for the food stamp eligible population using the 2000 - 2002 Medical Expenditure Panel Survey (MEPS), a nationally representative survey of the U.S. civilian, non-institutionalized population. To identify the effect of program participation on overweight status we use instrumental variables methods that exploit exogenous variation in program exclusion criteria at the national level and differences in state level program rules and measures of access. We also make use of the longitudinal dimension of the MEPS to estimate random effects discrete factor models. These models are less sensitive to exclusion restrictions than single-equation instrumental variables methods and allow us to explicitly control for individual level time-invariant unobservables (Morz, 1999). We subsequently estimate the impact of FSP participation on medical expenditures, both directly, and indirectly through changes in overweight status. Obesity attributable increases in medical expenditures are then determined for the Medicaid eligible population as well as the sub-population of individuals suffering from certain chronic conditions, such as diabetes and hypertension. These estimates will help policy makers determine whether to investigate alternative benefit delivery mechanisms or provide supplemental nutrition education through the FSP.
