Under - reporting , Take - up , and the Distributional Effects of the Food

Benefit receipt in major household surveys is often underreported. This understatement has major implications for our understanding of the economic circumstances of disadvantaged populations and the distributional effects of government programs. This paper examines underreporting of food stamps by combining administrative microdata for the Food Stamp Program (FSP) and nationally representative survey data. We provide a new econometric method for estimating the determinants of reporting that uses two data sources with overlapping demographic characteristics rather than requiring matched individual data. This method compares the characteristics of those who report receipt in the survey to the characteristics of recipients in the administrative data to determine the influence of those characteristics on reporting. Our estimates using this two sample estimation procedure indicate that observable characteristics are related to underreporting. We then show how these results can be used to correct for underreporting bias in studies of FSP participation or the distributional effects of the FSP. Our results also have implications for studies that use FSP receipt as an explanatory variable. * This research received support from the USDA Food Assistance Research Development Grant Program. We thank Lisa Barrow, Bob Dalrymple, Dan Hungerman, Robert LaLonde, and attendees at two USDA Research Development Grant Workshops for helpful comments. We also thank April Wu for excellent research assistance. Meyer: Harris School of Public Policy Studies, University of Chicago, 1155 E. 60th Street, Chicago, IL 60637, [email protected]. Sullivan: University of Notre Dame, Department of Economics and Econometrics, 447 Flanner Hall, Notre Dame, IN 46556, [email protected].