Friday, October 8, 2010

The Food Assistance National Input-Output Multiplier (FANIOM) Model and Stimulus Effects of SNAP

The USDA just released a study of the impact of stimulus funds spending on economic activity involving the Supplemental Nutrition Assistance Program (SNAP).

From USDA's webpage for The Food Assistance National Input-Output Multiplier (FANIOM) Model and Stimulus Effects of SNAP:
USDA’s Economic Research Service uses the Food Assistance National Input-Output Multiplier (FANIOM) model to represent and measure linkages between USDA’s domestic food assistance programs, agriculture, and the U.S. economy.

From the report summary:
IOM and macroeconomic models have been used for assessing the multiplier effects from government expenditures authorized under the American Recovery and Reinvestment Act of 2009 (ARRA), a Federal response to the recession that began in 2008.

What did they find?
The FANIOM analysis of SNAP benefits as a fiscal stimulus finds that:
  • An increase of $1 billion in SNAP expenditures is estimated to increase economic activity (GDP) by $1.79 billion. In other words, every $5 in new SNAP benefits generates as much as $9 of economic activity. This multiplier estimate replaces a similar but older estimate of $1.84 billion reported in Hanson and Golan (2002).
  • The jobs impact estimates from FANIOM range from 8,900 to 17,900 full-time-equivalent jobs plus self-employed for a $1-billion increase in SNAP benefits. The preferred jobs impact estimates are the 8,900 full-time equivalent jobs plus self-employed or the 9,800 full-time and part-time jobs plus self-employed from $1 billion of SNAP benefits (type I multiplier).
  • Imports reduce the impact of the multiplier effects on the domestic economy by about 12 percent.
Source:, viewed Oct 8, 2010