Food Stamps and Food Insecurity: What Can be Learned in the Presence of Nonclassical Measurement Error?

Journal of Human Resources (JHR), 43(2), Spring 2008, 352-82

Craig Gundersen, Iowa State University

Brent Kreider, Iowa State University

Abstract. Policymakers have been puzzled to observe that food stamp households appear more likely to be food insecure
than observationally similar eligible nonparticipating households. We reexamine this issue allowing for nonclassical reporting
errors in food stamp participation and food insecurity. Extending the literature on partially identified parameters, we introduce
a nonparametric framework that makes transparent what can be known about conditional probabilities when a binary outcome
and conditioning variable are both subject to nonclassical measurement error. We find that the food insecurity paradox hinges
on assumptions about the data that are not supported by the previous food stamp participation literature.