Optimal Food Stamp Subsidy Scheme
نویسنده
چکیده
This paper constructs a simple model to illustrate that the current food stamp subsidy scheme fails to achieve its aim due to the crowding-out effect. In particular, if the household income is sufficiently low, only the corner solution exists and full subsidy is needed. The optimal food stamp subsidy scheme is identified and the subsidy efficiency rate is introduced to measure the impact on food expenditures once the subsidy regime changes. JEL classification: D11, H23, I38
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