BOX 5-1
Economies of Scale

Food costs for the Thrifty Food Plan are based on individuals in the context of a reference four-person family. For households that are larger or smaller than the reference, per-person food costs are adjusted for economies of scale using a suggested adjustment such as the following:

•   One person—add 20 percent

•   Two persons—add 10 percent

•   Three persons—add 5 percent

•   Five or six persons—subtract 5 percent

•   Seven or more persons—subtract 10 percent

SOURCE: CNPP, 2011.

33 percent for a two-person family, and 13 percent for a three-person family. The published tables do not allow for separately calculating multipliers for households of five or larger. These calculations are based on averages for all consumer units and are not restricted to low-income households, whose purchasing patterns may differ from those of other households. In addition, they are based on actual consumption patterns and do not account for differences in nutritional intake or adequacy that may exist across different household sizes. Nonetheless, the evidence reviewed by the committee suggests that the current economies-of-scale multipliers may be substantially underestimated for small households.

Household Composition and the Benefit Level

Recommended nutrient intake varies by individual characteristics such as sex, age, and level of activity. Therefore, the cost of food under the TFP also varies by these characteristics, with lower levels for the elderly and young children. Instead of being adjusted to meet each household’s individual characteristics, the SNAP benefit amount is set for a representative “reference family,” allocating all households of a certain size the same benefit even if their individual characteristics (age, sex, activity level) vary. As discussed in Chapter 2, a 1975 U.S. Circuit Court decision took issue with this assumption and directed USDA to either individualize benefits or set them at a high enough level “so that virtually all recipients are swept



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