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Abstract
Most Americans need to consume more fruits, vegetables, and dairy products. This need
is particularly acute among low-income individuals. The objective of this study is to examine the
cost effectiveness of two economic policies that use alternative policy levers available within the
Supplemental Nutrition Assistance Program (formerly Food Stamp Program) to increase
consumption of these under-consumed foods. Data from three nationally representative surveys
are used to estimate demand elasticities, marginal propensity to spend on food out of food stamp
benefits, and consumption amount of and spending on under-consumed foods among food stamp
recipients. Results of the analyses suggest that a 10% price subsidy would curtail consumption
deficiencies by 4–7% at an estimated cost of $734 million a year. When the same $734 million is
used to finance food stamp benefits, consumption deficiencies are predicted to narrow by only
0.35 to 0.40%.