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While research establishing the link between high food prices and increased food insecurity in developing countries is robust, similar research about the United States has been lacking. This has been due in part to a lack of suitable price data, but it has also been due to the assumption that prices matter less in the United States, where households spend a relatively small fraction of their income on food. Jn this article we examine the role that local food prices play in determining food insecurity in the United States by using newly-developed price data. We examine whether law-income households participating in the Supplemental Nutrition Assistance Program (SNAP, formerly Pood Stamps) are more likely to be food insecure in areas where food prices are higher. We find that the average effect of food prices on the probability of food insecurity is positive and significant: a onestandard deviation increase in food prices is associated with increases of 2.7, 2.6, and 3.1 percentage points in household, adult, and child food insecurity, respectively. These marginal effects amount to 5.0%, 5.1%, and 12.4% increases in the prevalence of food insecurity for SNAP households, adults, and children, respectively. These results suggest that indexing SNAP benefits to local food prices could improve the ability of the program to reduce food insecurity and economic hardship more generally in areas with high food prices.
Applied Economic Perspectives and Policy provides a forum to address contemporary and emerging policy issues within an economic framework that informs the decision-making and policy-making community. AEPP welcomes submissions related to the economics of public policy themes associated with agriculture; animal, plant, and human health; energy; environment; food and consumer behavior; international development; natural hazards; natural resources; population and migration; and regional and rural development.
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Applied Economic Perspectives and Policy
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