Assessing the Economic Impacts of Food Assistance Policy Using a Computable General Equilibrium Approach Public Deposited

http://ir.library.oregonstate.edu/concern/undergraduate_thesis_or_projects/bg257h00h

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  • Over the past several years, increases in the Supplemental Nutrition Assistance Program (SNAP) have coincided with the 2007-2008 recession and the higher rates of unemployment in the U.S. With SNAP being the largest program, in terms of spending embedded in the farm bill, it is likely to see some spending cuts. The question that this study poses is “What kind of economic impacts could SNAP spending cuts have on household welfare, the agricultural and food industries, and factor markets?” To assess these economic impacts a Computable General Equilibrium (CGE) Model using 2010 national level data is employed. A policy experiment is run where the SNAP program is eliminated creating a revenue neutral transfer of income from SNAP eligible households to ineligible households. The model finds changes in income and commodity output of the food and agriculture sectors and other sectors of the economy. There are almost no changes in primary factor markets and commodity prices. The experiment causes consumption patterns to change across household groups and creates a significant change in household welfare. The experiment shows that SNAP spending is miniscule in the United States’ $15 trillion economy.
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