We construct a model to illustrate that the current food stamp subsidy scheme fails to achieve its stated aim due to the crowding-out effect. More specifically, if the household income is sufficiently low, only a corner solution exists, and a full subsidy is needed.
Food stamp subsidy scheme, Crowdingout, Corner solution
Crowding-out Effect of the Current Food Stamp Subsidy Scheme. (2011). Economics Letters. 112, (1), 1-2. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/1343
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