Do Food Stamps Cause Obesity? A Generalised Bayesian Instrumental Variable Approach in the Presence of Heteroscedasticity

Salois, Matthew and Balcombe, Kelvin (2011): Do Food Stamps Cause Obesity? A Generalised Bayesian Instrumental Variable Approach in the Presence of Heteroscedasticity.

Abstract

The impact of covariates on obesity in the US is investigated, with particular attention given to the role of the Supplemental Nutrition Assistance Program. The potential endogeneity of participation in SNAP is considered as a potential problem in investigating its causal influence on obesity using instrumental variable (IV) approaches. Due to the presence of heteroscedasticity in the errors, the approach for dealing with heteroscedastic errors in Geweke (1993) is extended to the Bayesian instrumental variable estimator outlined in Rossi et al. (2005). This approach leads to substantively different findings to a standard classical IV approach to correcting for heteroscedasticity. Although findings support the contention that the SNAP participation rate is associated with a greater prevalence of obesity, the evidence for this impact is substantially weakened when using the methods introduced in the paper.

• Item Type: MPRA Paper
• Language: English
• Keywords: Bayesian; Food Stamps; Food Insecurity; Instrumental Variabls; Heteroscedasticity; Obesity.
• Subjects: I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I38 - Government Policy ; Provision and Effects of Welfare Programs; I - Health, Education, and Welfare > I0 - General > I00 - General; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C31 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions ; Social Interaction Models; D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C11 - Bayesian Analysis: General

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