Study to determine if food stamp discount improves nutrition in US

The US agriculture department awarded $20 million to Massachusetts and a Cambridge-based research firm to test whether providing subsidies for buying produce will encourage food stamp recipients to eat more nutritious meals.

Of the 50,000 households in Hampden County that rely on food stamps, several thousand will be offered a 30-cent discount for every dollar spent on fresh fruits and vegetables, while other families will continue to pay full price. Households will be tracked for 15 months to see whether their eating habits change and health outcomes, including obesity rates, improve. State officials hope to begin the program in fall 2011.

This initiative will be the first large-scale study that has a rigorous methodology for measuring the impact of financial incentives on food consumption. However, earlier this year a study was published in Contemporary Economic Policy looking at different ways in which alternative strategies could be used to increase consumption of under-consumed foods, such as fruit, vegetable, and dairy products for participants of the Supplemental Nutrition Assistance Programme, or SNAP.

Using econometric models, price elasticity estimates and nutrition recommendations based on the 2005 dietary guidelines for Americans, the researchers first examined how a 10% subsidy on fruit, vegetables, and milk would affect current low consumption of these foods.

They found that such a subsidy could close the deficiency of these foods by 4–7%. In addition, they found that a price subsidy of 22% would be required in order to close the consumption gap by 10% for vegetables.

Further, the authors estimated the cost of a 10% price subsidy at an annual $293 million for vegetables, $281 million for fruits (including $184 million for non-juice fruits and $97 million for fruit juice), and $160 million for fluid milk, or a total of $734 million a year.