The Food Stamp Program Provides Low Income Households with Coupons

Essay

The food stamp program provides low income households with coupons which can be exchanged for some specified dollar value worth of food. Many economists argue that this program is an inefficient means of increasing the well-being of low income families. Proponents of this view argue that an equivalent cash subsidy would bring about a greater increase in the well-being of the low income families receiving aid. Although many economists hold this view, not all policy analysts agree with the advocates of cash payments instead of food stamps. Advocates of the existing program argue that food stamps provide an incentive for low income families to increase the nutritional quality of their diets.
a. Carefully analyze the arguments regarding increases in well-being under cash payments and food stamp programs. Use graphical analysis to present your arguments.
b. Critically evaluate the pros and cons of the food stamp program. Do food stamps ensure that low income families increase their consumption of food?