4. (30 pts) Read the NY Times article \"In the Shopping Cart of a Food Stamp Hou

Question

4. (30 pts) Read the NY Times article "In the Shopping Cart of a Food Stamp House- hold: Lots of Soda" found here: https://www.nytimes. com/2017/01/13/wel1/eat,/ food-stamp- snap-soda.html and on eLC in the Readings section. Develop a model to analyze the following claim from the article (paraphrasing): "SNAP promotes the purchase of unhealthy foods. Your model should (at a minimum) include the following: a) The hypothesis (use the word "canse" in your hypothesis). b) The data you could use or collect to analyze the claim. c) The assumptions you might use in your model. d) A discussion of whether or not the relationship is causal. Specifically, does re- oth the endogenous and verse causality exist and/or an outside influence driving bo exogenous variable?

Explanation / Answer

"SNAP promotes the purchase of unhealthy foods."

The article aims at finding whether SNAP promotes purchaseof unhealthy foods. It has been described in the article that households receiving food stamps spent 9.3percent of their bills on sweetended beverages which is higher than the percentage spent by households who donot receive food stamps.

a) Hypothesis

Null Hypothesis : SNAP do not cause the purchase of unhealthy foods

Alternate Hypothesis : SNAP cause the purchase of unhealthy foods.

b) Data Collection

Primary Data : Data collected from the households by conducting a survey on consumers whether SNAP promotes the purchase of unhealthy foods.

Secondary Data : Past sales record collected from the major grocery stores.

c) Assumptions:

It is assumed that SNAP promotes the purchase of unhealthy foods as the entire article supports the same statement.

d) Discussion

The relationship is causal as the research is about the cause of SNAP program and effect is on the households whether it promotes the purchase of unhealthy foods or not.

Outside influence is the government program to provide the food at subsidized rates to the households below poverty line.

Reverse Causality is that if the government stops the purchase of junk food items at a subsidised rate under SNAP program, whether it causes any effect on the consumption of junk foods or on the health of the American households and the diseases like obesity and Type II Diabetes.

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