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...itt,s1986; Wales and Woodland, 1983). We follow the maximum simulated likelihood proceduresdescribed in Yen, Lin, and Smallwood (2003), and estimate the first n − 1 share equations as asTobit system (=-=Amemiya, 1974-=-; Pudney, 1989). The food category “mixtures” is omitted in thesestimation. Observed expenditure shares wi relate to the stochastic latent shares ( )i is θ + εssuchsthats(2) max{ ( ) ,0}, 1,..., 1,i i...

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...tivariate normal with zero means and a finitescontemporaneous covariance matrix. While this Tobit system approach is less structural than thesKuhn-Tucker (Wales and Woodland, 1983) and virtual-price (=-=Lee and Pitt, 1986-=-) alternatives, its9sis based on the reduced form which corresponds to the simultaneous equations system ofsAmemiya (1994) and resembles the Kuhn-Tucker model of Wales and Woodland (1983); it alsosavo...

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...s and Woodland, 1983). We follow the maximum simulated likelihood proceduresdescribed in Yen, Lin, and Smallwood (2003), and estimate the first n − 1 share equations as asTobit system (Amemiya, 1974; =-=Pudney, 1989-=-). The food category “mixtures” is omitted in thesestimation. Observed expenditure shares wi relate to the stochastic latent shares ( )i is θ + εssuchsthats(2) max{ ( ) ,0}, 1,..., 1,i i iw s i n= θ +...

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...ternative intervention strategies to increase consumption ofsunder-consumed goods among this population. While national survey data have been used tosestimate food demand systems segmented by income (=-=Park et al., 1996-=-; Huang and Lin, 2000), aslow-income sample does not correspond fully to food stamp recipients. There has existed onlysone nationally representative sample of food stamp receiving households—the 1996–...

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...ay for a 10% price subsidy.sIV.sNON-TARGETED INCENTIVE: RAISING FOOD STAMP BENEFITsResearch has consistently shown that food stamp benefits increase food spending moresthan an equal amount of income (=-=Fox, Hamilton, and Lin, 2004-=-). Given an increase in foodsexpenditure resulting from an increase in food stamp benefits, the expenditure elasticitiessobtained from the food demand system estimation can be used to predict consumpt...

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...its.sWe estimate the MPSf using the 1996–97 NFSPS data which contain information for foodsstamp benefits and income. Data used in previous studies on the topic are outdated. Followingsthe literature (=-=Levedahl, 1995-=-; Senauer and Young, 1986), we estimate a double-log model ofsfood expenditure. Specifically, household food expenditure (M) per capita is regressed on totalsincome (sum of food stamp benefits (S) and...

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... the MPSf using the 1996–97 NFSPS data which contain information for foodsstamp benefits and income. Data used in previous studies on the topic are outdated. Followingsthe literature (Levedahl, 1995; =-=Senauer and Young, 1986-=-), we estimate a double-log model ofsfood expenditure. Specifically, household food expenditure (M) per capita is regressed on totalsincome (sum of food stamp benefits (S) and other sources of income ...

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...e, diet-related premature deaths fromscoronary heart disease, cancer, stroke, and diabetes are estimated to account for 5.3 percent of allsdeaths in the U.S. and cost the society $71 billion in 1995 (=-=Frazao, 1999-=-). Overweight andsobesity have been estimated to cost U.S. society as much as $117 billion annually (USDHHS,s2001). The need to identify effective intervention strategies to alleviate the costly diet-...

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..., we include household size to account for differences inshousehold demand. Household size is the single most important noneconomic factor affectingshousehold food demand (Prais and Houthakker, 1971; =-=Smallwood and Blaylock, 1981-=-). Samples8sstatistics of all variables (expenditures, quantities, prices, and household size) used in thesdemand system estimation are presented in Table 1.sB. Econometric ModelsThe empirical analysi...

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...ion are drawn from the 1996–97 National FoodsStamp Program Survey (NFSPS), which is the most recent USDA survey to collect food use,sfood cost, and socio-demographic data among food stamp households (=-=Cohen et al., 1999-=-). ThesNFSPS collected food use data for home consumption only, and not for food consumed awaysfrom home. No national survey has been conducted since the NFSPS to collect data, which cansbe used to es...

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... fromsprice subsidy should be treated as upper bounds.sTo estimate the change in each quantity we need to employ the general equilibriumsdemand elasticity to address feedback effects between markets (=-=Buse, 1958-=-). Subsidies applysonly to fruits (juice and non-juice), vegetables and milk so that prices of un-subsidized foodssremain unchanged. Among the four subsidized food groups, only non-juice fruits and mi...

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...hatsconsumers are not very responsive to taxes on salty snacks (Kuchler, Tegene, and Harris, 2008).s19sThis is the “first fundamental theorem of taxation: a tax has little effect on inelastic goods”s(=-=McCloskey, 1982-=-, p. 309).sIt is important to point out that even though the increase in consumption appears to bessmall, it could result in substantial economic benefits by reducing cases of diet-related illnesssesp...