The food stamp benefit formula: Implications for empirical research on food demand

To understand how food stamps affect food spending, nonexperimental researc h typically requires some source of independent variation in food stamp ben efits. Three promising sources are examined: (a) variation in household siz e, (b) variation in deductions from gross income, and (c) receipt of minimu m or maximum food stamp benefits. Based on results of a linear regression m odel with nationally representative data, 90% of the total variation in foo d stamp benefits is explained by gross cash income and household size varia bles alone. This finding raises concern about popular regression approaches to studying the Food Stamp Program.