| Home > American Agricultural Economics Association (AAEA) > 1990 Annual meeting, August 5-8, Vancouver, Canada > THE EFFECT OF FUNCTIONAL FORM ON THE ESTIMATED MARGINAL PROPENSITIES TO SPEND OUT OF FOOD STAMPS AND MONEY INCOME AND THE IMPLICATIONS FOR A CASH-ONLY FOOD STAMP PROGRAM |
Using linear in the coefficients specifications (LCS), previous estimates of the marginal propensity to spend on food out of food stamps are about 4 to 5 times the MPS out of income. This magnitude implies that food expenditures would fall drastically if the program was cashed-out. The LCS and a specification of the expenditure equation based on a generalization of Roy's identity and a translog indirect utility function are estimated. The implications of these functional forms on cashing-out the Food Stamp Program are discussed.
