An analysis of food stamp redemptions

Abstract: The research attempted to design and estimate statistical models as a means of monitoring the U.S. Dept. of Agriculture's food stamp program and redemption account. The existence of a lag structure in the use and redemption of food stamps was also investigated. The results suggested that food stamps are used by recipients within the month they are received. However, some lag in the redemption of the stamps by the Federal Government is probably the result of lags in the banking system. Two forecast models were developed to demonstrate 1) actual monthly requests for redemption ; and 2) monthly variations in the Government liability implied by the stamp redemption process. The model indicated that a balance of approximately 25% of monthly redemptions before the elimination of the purchase requirement is adequate to meet possible underestimated monthly liabilities. The research also showed that a very small percentage of stamps are not used and redeemed at sometime.