Equivalent Scales, Scale Economies, and Food Stamp Allotments: Estimates from the Nationwide Food Consumption Survey, 1977–78

Allotment and economy‐of‐scale adjustments are important in determining benefit levels for households participating in the Food Stamp Program. Economy‐of‐scale factors adjust levels of benefits based on the sizes of participating households. These economy‐of‐scale factors and the allotment are calculated currently using diet status, income, and household size. This paper shows that food stamp allotments for different household sizes can be determined independent of diet status using standard demand theory and the age‐sex composition of the household. The results indicate that scale adjustments now used are related more to household composition than true economies.