1. Income Volatility and Household Consumption.
- Author
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Blundell, Richard and Pistaferri, Luigi
- Subjects
FOOD relief ,INCOME ,FOOD stamps ,CONSUMPTION (Economics) ,INCOME inequality ,POOR people ,PUBLIC welfare ,WELFARE economics - Abstract
The impact of food assistance programs (food stamps) in a period of rising income inequality in the United States is analyzed using 1978-92 PSID data. We assess to what extent food assistance can be viewed as an effective insurance to permanent shocks to income. The results show that the program has a substantial consumption-smoothing effect in the low income population: The response of food consumption to a permanent income shock is a third lower after accounting for the monetary value of food stamps. [ABSTRACT FROM AUTHOR]
- Published
- 2003
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