The Impact of the Food Stamp Program in Puerto Rico [1977] by La Colección Puertorriqueña

THE IMPACT OF THE FOOD STAMP PROGRAM IN PUERTO RICO

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A Joint Research Project:

U.S. Department of Agriculture Food and Nutrition Seivice and the

Commonwealth or Puerto Rico

Department of Social Services

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THE IMPACT OF THE FOOD STAMP PROGRAM IN PUERTO RICO

A Joint Research Project;

U.S.Department of Agriculture Food and Nutrition Service and the

Commonwealth of Puerto Rico

Department of Social Services

PARIMAL CHOUDHURY

Project Director

SUPHAN ANDIC Consultant

Library of Congress Catalog Card Number 77-79307

This study may not be reproduced in whole or in part without written permission of the Food and Nutrition Service, U.S. Department of Agriculture,and the Department of Social Services, Commonwealth of Puerto Rico.

PREFACE

This study is the second and final report in the se

ries assessing the impact of the Food Stamp Program on cons\amer behavior and the food marketing system in Puerto Rico.

The first study in the series. The Food Distribution

System and Food Stamp Program in Puerto Rico, was published in 1975.

Both of these studies have been carried out in

compliance with Modification Number 2 of Agreement No. 1235-600-137 between the United States Department of Agricul ture, Food and Nutrition Service, and the Commonwealth of Puerto Rico.

The assessment of the impact of the Food Stamp Program has been based on surveys of food retailers, wholesalers, and consumers in thre^ areas of Puerto Rico;

Moca, on the

northwestern corner of the island, one of the five munici

palities where the Program was initiated on July 1, 1974; Guayama, on the southeast coast of the island, which was

incorporated into the Program in its third stage beginning on November 1, 1974; and Barrio Obrero, within the

111

municipality of San Juan, which also had access to the benefits of the Program in its third stage of implemen tation.

The impact of the Food Stamp Program has been assessed

by investigating the food distribution system and cons\amer behavior and characteristics in these three areas before

and after the implementation of the Program and evaluating

the comparative findings.

This was done by analyzing the

results of surveys among 171 food retailers, eight food wholesalers, and 562 households in 1974; 155 food retailers,

eight food wholesalers, and 483 households in 1975.

A summary of the findings is given at the outset.

This is followed by an introductory section summarizing the major findings of the first study and their relation to the scope and objective of the present one.

A detailed

description of the methodology is given in a subsequent section.

The report ends with an analysis of the findings.

The study would not have become a reality if it were not for active and enthusiastic cooperation of various agencies of the Government of Puerto Rico.

First and

foremost among them is the Department of Social Services,

particularly the Food Stamp Program Administration.

Other

contributing agencies are the University of Puerto Rico, Agricultural Extension Service, Department of Commerce, Department of Labor, and the Planning Board.

Our sincere

thanks are due to their staff for furnishing us with the

necessary information and for their active participation in other facets of the study.

We are very grateful to Hon. Ram6n Garcia Santiago, former Secretary of Social Services, who originally orga

nized the study group, provided the required facilities,

and offered encouragement throughout the duration of the study.

We are also very much grateful to Hon. Jenaro

Collazo-Collazo, Secretary, Department of Social Services, for his continued support in terminating the study,

the Department of Social Services our profound gratitude

is due to Ms. Lydia Monet, who has since left the Depart ment, for her endless efforts in supervising the analysis

of data and preparation of tables.

Her dedication and

timeless effort have been invaluable in making this

study a success.

Our sincere thanks are due to Mr. Luis

Del Toro for his assistance in all phases of the study

from its very inception.

Thanks are also due to Mr. Eli

J. Til6n, who has also since left the Department, who

patiently supervised the field surveys and was of invaluable

aid in the early stage of data analysis.

Our gratitude

is also due to Ms. Mercedes Soils, who has also since left

the Department, for her help in the analysis of data and in organizing and supervising the reproduction of the manuscript.

Our special thanks are also due to Dr. Luz

M. Torruellas for her endless patience in editing the manuscript.

Special appreciation is extended to Dr. Stephen J. Hiemstra of the Food and Nutrition Service for his valuable

comments and suggestions in all stages of the study. Special thanks are due to Dr. J.c. Chai, also of the Food and Nutrition Service, for his suggestions and comments.

Finally, acknowledgements are due our secretaries, Myrna Aponte Torres and Evelyn Perez Rivas for their un-

fsilirig patience in typing and retyping the manuscript.

San Juan, Puerto Rico

Parimal Choudhury

November, 1977

Suhpan Andic

TABLE OF COISJTENTS Page

Preface List of Tables

iii viii

List of Figures

xiii

I. II.

III.

Summary and Conclusions

The Methodology

Selection of Areas

Selection of Samples

1. Food Retailers and Wholesalers 2. Households

29 33

IV.

Introduction

The Questionnaires

The Analyses and Results:

Food Marketing

Retail Outlets

Wholesale Outlets

The Analyses and Results:

Households

Participation in the Food Stamp

Household Size and Income Level in

The Impact of the Food Stamp Program

on Household Income

184

Demographic and Occupational Characteristics

117

The Impact of the Program

136

Evaluation of the Program by

Program in Puerto Rico

the Survey Areas

Participant Households Appendix:

153

A General Methodology for the Measure ment of the Impact of the Food Stamp

Program on Aggregate Demand

Vll

157

LIST OF TABLES

Page

III.

Number of Wholesalers and Retailers

in the 1974 Surveys III.

Number of Wholesalers and Retailers

in the 1975 Surveys

32 35

III.

Household Sample Size, 1974 and 1975

IV.

Food Retail Outlets, by Kind of Business

IV.

Retail Food Sales, May/Sept. 1974 and Oct. 1975

IV.

Retail Food Sales (Identical Items), May/Sept. 1974 and Oct. 1975

Percentage Distribution of Food Sales, By Sales Size

Food Retail Outlets: Change in the Distribution of Combined Sales, 1974 and 1975 (1974 prices)

IV. 6

Food Retail Outlets:

Percentage

Distribution of Monthly Food Sales, by Food Categories, 1974 and 1975

IV.

Food Retail Outlets: Monthly Quantities Sold, by Food Categories, 1974 and 1975

IV. 8

Food Retail Outlets:

Average Prices,

by Food Categories, 1974 and 1975

Vlll

Page

IV.

Price Comparisons:

Survey Results vs.

Puerto Rico Department of Labor's Consvmier Price Index for Wage Earners

IV. 10

Monthly Food Sales, by Wholesalers,

May/Sept. 1974 and Oct. 1975 IV. 11

Food Wholesale Outlets: Average Prices,

by Food Categories, 1974 and 1975 V.

Number of Households, by Household Size and Income Level

Number of Food Stamp Participants, by Household Size and Income Level

Number of Food Stamp Households,

by Household Size and Income Level V.

Non-Participating Households, by Household Size and Income Level

Number of Household Members, by Household Size and Income Level

Percent of Population Receiving Food Stamps

Food Wholesale Outlets: Monthly Quantities Sold, by Food Categories, 1974 and 1975

IV. 13

Food Wholesale Outlets: Percentage Distribution of Monthly Food Sales,

by Food Categories, 1974 and 1975 IV. 12

100

Income Distribution, by Monthly Income Level

102

Page

V. 10

Percentage Distribution of Income, Pre-and Post-Food Stamp Program

105

Impact of the Bonus Food Stamps on Cash Income of Participant Households, by Household Size and Income Level

108

The Impact of the Food Stamp Program on Income of Participant Households, by Household Size and Income Level

V. 11

Number of Household Members, by Age and Income Level

V. 12

119

Number of Household Members, by Age and Household Size

V. 13

109

120

Number of Household Members 18 years or Younger, by Occupational Status and Income Level

V. 14

121

Number of Household Members 18 years or Younger, by Occupational Status and Household Size

V. 15

Number of Households, by Age and Sex of Household Head and Income Level

V. 16

122

Niomber of Household

124

Heads, by Age

and Sex of Household Head and House

hold Size

V. 17

125

Number of Households, by Civil Status and Sex of Head and Income Level

V. 18

Number of Households, by Civil Status and Sex of Head and Household Size

V. 19

126

127

Number of Households, by Civil Status of Head and Income Level

128

Pacre

V. 20

Number of Households, by Occupational Status of Head and Income Level

V. 21

Number of Households, by Occupational Status of Head and Household Size

V. 22

132

Number of Households, by Sex and Occupational Status of Head and House hold Size

V. 24

131

Niamber of Households, by Sex and Occupational Status of Head and Income Level

V. 23

129

133

Number of Household Members 18 Years

or Older, by Occupational Status and Household Income Level V. 25

134

Nvimber of Household Members 18 Years

or Older, by Occupational Status and Household Size V. 26

135

Food Stamp Values, Payments, Net

Bonus, by Income Level V. 27

137

Food Stamp Values, Payments, Net

Bonus, by Household Size V. 28

Income Level and Weekly Food 141

Expenditures

V. 29

138

Monthly Expenditures on Items Other than Food

145

V. 30

Food Expenditures, by Category

149

V. 31

Reasons for Not Participating in

the Food Stamp Program

133 xi

Page

A - 1

Proportional Allocation of Supplementary income ("Bonus"),

by Income Level and Family Size A - 2

A - 3

A - 4

Estimated Monthly Food Expenditures, by Income Level and Family Size,

per participating Family

172

Bonus as Percentage of Pre-Program Income

173

Ratios of Additional Food Purchases

to Pre-Program Food Expenditures A - 5

169

175

Ratios of Additional Non-Food

Purchases to Pre-Program Non-Food Expenditures

XI1

176

LIST OF FIGURES

Page

IV. 1

Food Price Indices, Puerto Rico, 1967 = 100

IV. 2

Consumer Price Indices, Puerto Rico, and USA, 1967 = 100

V. 1

Percentage Distribution of Persons by Income Level

V. 2

Distribution of Income, Excluding Bonus Food Stamps: Moca, Guayama, and Barrio Obrero, 1974 and 1975

V. 3

Distribution of Income with and Without

Bonus Food Stamps: A - 1

103

Moca, Guayama, and

Barrio Obrero, 1975

107

Hypothetical Indifference Curve

161

Xlll

SUMMARY AND CONCLUSIONS

The present report gives the findings of two sets of

surveys among food retailers, wholesalers, and households in the municipalities of Moca and Guayama and in the sec

tion of Barrio Obrero in the municipality of San Juan. The first surveys were conducted before the implementation of the Food Stamp Program; the second set

ducted about a year thereafter.

of surveys was con

The intention was to assess

the impact of the Program on the demand for food and its marketing in Puerto Rico via the changes in sales and ex penditure patterns of food dealers and households, respec tively.

The results relating to retail food outlets were obtained

from 171 responses in 1974 and 155 in 1975.

In terms of numbers, grocery stores and mixed stores

prevailed in 1974 in all three study areas.

In 1975 there

has been a significant shift towards mixed stores. More

than two-thirds have monthly gross sales of 4,000 or less. b.

About three-fourths of the stores in Moca and about

one-half in Guayama are rural. Nevertheless, rural food sales are only one-half of the total sales in Moca and about one-fourth in Guayama; for all rural establishments are

small.

They have, however, registered significant sales in

creases from 1974 to 1975.

Most of the retail outlets participate in the Food

Stamp Program.

Those who do not, claim that either they

have had no response to their request, or are not interested because of their extremely low monthly sales volume. d.

Responses to the second set of questionnaires af

firmed what was revealed in the first set, namely, that

sales capacity could be expanded without having to increase physical capacity.

In the overwhelming majority of the

cases store owners and/or managers consider that there have occurred no need for expansion in store area, and that in

creased sales have been successfully handled with the ex

isting physical capacity. e.

In much the same way food retailers have not found

it necessary to purchase new equipment in order to meet the

expanded sales they expected and realized, except for those whose monthly sales are in the top two brackets. f.

A year earlier educational assistance on Program

benefits and processing and handling of coupons as well as financial assistance, especially to increase inventories,

were expressed as desirable; nevertheless, the majority of the stores did not ask for such assistance, and the few

small size outlets that did, claim that they got no

sponse to their petitions from the government. g.

Monthly food sales have grown unevenly among the

three areas.

Growth has been dramatic in Moca and Barrio

Obrero, even after accounting for price level changes, but

extremely moderate in Guayama.

Tlhe implementation of the

Program has coincided with the most severe recession in the Island's economic history, and Guayama has been the worst

hit area.

Consequently, the growth in retail food sales has

kept its level in 1974 prices.

Without the Program retail

food sales would no doubt have declined in that area.

Bottlenecks in wholesale distribution are cited as

one of the most important impediments to sales expansion. It is also interesting to note a response that stems from

small establishments which emphasizes the strong competition they face vis-a-vis large retailers.

The degree of concentration which was evident in

1974, in that less than 10 percent of the establishments in

Guayama and Barrio Obrero accounted for almost oneâ&#x20AC;&#x201D;half of the gross food sales, appears to have increased.

Two-thirds

of the sales in Barrio Obrero, e.g., are accounted for by

five stores with monthly sales of $15,000 or more, and they barely constitute oneâ&#x20AC;&#x201D;tenth of the total retail food out lets.

j. Food sales with stamps constitute a large portion of total food sales:

78 percent in Moca, 60 percent in

Guayama, and 51 percent in Barrio Obrero.

The proportion

of sales with stamps to total food sales rises with increasing sales.

Thus the few large establishments that account for

the largest share in retail food sales account for an even

larger share of sales with stamps.

Commodities which are sold in large quantities are

rice; beef, pork and chicken meat; milk and dairy products; coffee and sugar.

Not all have registered expanded sales;

in fact, there have been substantial declines in quantities sold of rice, dry beans, poultry, codfish, and sugar.

This

concurs with earlier observations on shortages in selected food categories. 1.

Although the findings attest to an increase in food

prices in general, the hypothesis that the Food Stamp Pro-

gram would have significant impact on food prices is not

borne out, since the change in retail food prices is esti mated to be 7.8 percent between 1974 and 1975.

This is

identical to the increase in the food component of the Puerto Rico consumer price index from September 1974 to October 1975 and almost equal to the increase in United States food prices from the second

quarter of 1974 to the

fourth quarter of 1975. In the previous year, when the Food Stamp Program was not yet in operation, food prices had increased by 23 percent. it is concluded, therefore,

that the Food Stamp Program in Puerto Rico does not gener ate food price increases separate and in addition to those

price changes that may arise from the implementation of the Program in mainland United States. in contrast, it does have an impact on real demand for food.

The results relating to wholesale food outlets were ob

tained from eight responses in the general line of groceries, ^11 participants in the Food Stamp Program.

a. The first set of surveys established that space per

establishment increased proportionately to food sales. They indicated the existence of excess capacity and hence the possibility of easy handling of increased volume.

This was

attested to by responses to the second round of questions that increased sales have not called for expansion in phys ical capacity.

b. In much the same way as food retailers, those food wholesalers who expected and realized expanded sales have not deemed it necessary to purchase new equipment or to re quest financing for inventories.

The increases in monthly food sales have not been

as dramatic as they have been at the retail level. prices, sales in

In 1974

Moca rose by 22 percent, in Barrio Obrero

by 9 percent, and in Guayama they declined by 3.8 percent, reflecting a similar pattern of differential change among the areas.

Since a significant increase in sales was

pected because of the increased demand generated by the

Food Stamp Program and the performance of the sampled whole salers have not demonstrated such and increase, the expla

nation may be that those wholesalers who may have registered increases in sales are not located within the sampling areas d.

Wholesale food prices are estimated to have risen

by 8.5 percent between 1974 and 1975, once again indicating that the price impact of the Program is determined by fac tors outside the economy of the Island.

4. The results relating to households were obtained from 562 responses in 1974 and 483 responses in 1975. Moca is overwhelmingly rural with only 5 percent of the households

living in urban districts, in Guayama the households are divided almost equally between urban and rural areas. Barrio Obrero is strictly urban.

a. Most households are concentrated in the lower in

come brackets: 80 percent have monthly incomes of $210 or less. Only a handful of the households interviewed in 1974

and 1975 are above the poverty thresholds. The highest monthly income reported in 1974 was $307 in Moca, $500 in Guayama, and $672 in Barrio Obrero. in 1975 the figures are $800, $800, and $1,139, respectively. b. Money income, as reported by the households, is un

equally distributed: a low share of income is received by a large percentage of the households with a low monthly in come, and a high share of income is received by a small per centage of households with a high monthly income.

Neverthe

less, there appears to be a movement towards a more equitable

distribution of primary income, a movement which is signif icantly enhanced by the added income provided by the bonus food stamps. Within a given level of income the importance

of the bonus food stamps rises, in general, with household size; within a given household size the importance of the bonus food stamps falls with the level of income. The re sult is that in low income households the bonus in some

instances is 20 to 25 times as high as the household's in come.

For all households taken together, the bonus more

than doubles their cash income.

c. The population is young: about 56 percent of the household menibers are under 18 years of age, consisting

mainly of students and pre-school children. d. More than two-fifths of the households are headed

by a female. About one-third of the households are headed by persons over 60 years of age and almost half of these are headed by a female. These households are concentrated

in monthly income levels of less than $150 and in small households.

e. A great proportion of household heads are not in the labor force because of retirement, old age, or some

handicap.

Close to one-third of the household heads are

unemployed and another one-third have part-time or tempo rary work.

The handicapped and the unemployed are predominant 8

in household members 18 years or older who are not house hold heads.

g. There does not appear to be a positive correlation between schooling and the level of income.

h. About four-fifths of the food expenditures are being

paid with stamps; as a result cash food expenditures repre sent about 36 percent of cash incomes. As a proportion of cash incomes, food expenditures (in cash and in stamps) are

75 percent higher but a great part of these expenditures is now paid with stamps. In 1974 prices food expenditures per household have risen by almost 15 percent while non-food

expenditures have risen by 41 percent. It is estimated that 35 cents out of each additional bonus dollar have been ^ent on food and 21 cents on non-food and that the balance has

been used to eliminate dissaving of recipients. Hence the

Program has had a greater marginal impact on food that on non-food expenditures but has raised spending on non-food by a greater percentage than food.

i. Income elasticity of demand for food rises with the level of income. This result is in accordance with findings of other studies that in the very low income levels this phenomenon is to be expected.

3â&#x20AC;˘ Participating liouseliolds evaluate ttie Program quite favorably, in a few cases the responses indicate miscon

ception as to eligibility, the importance of the benefits, and lack of attention by the authorities to the individual

household's situation. However few these cases may be, as such, they require looking into wherever they occur.

INTRODUCTION

In the first published report on the impact of the Pood Stamp Program on the food market and its system of distri

bution, ^ it was estimated that the number of families in Puerto Rico could rise to 726,193 by the end of fiscal year 1975.

Of these, 498,739

receive food stamps.

(69 percent) would be eligible to

Not all of the eligible families were

expected to participate in the Program. Since with a given

family size the benefit per person decreases with increasing income, and with a given income the net benefit per family increases with family size, all higher income as well as small size families would perhaps not take advantage of the

benefits they would have been entitled to.

estimated that about 75 percent of

the eligible families

were likely to participate in the Program.

The study had

At this rate of

Parimal Choudhury et.al.. The Food Distribution System and the Food Stamp Program in Puerto Rico.

Research Project:

A Joint

U.S. Department of Agriculture,Food

and Nutrition Service, and The Commonwealth of Puerto

Rico, Department of Social Rico 1975.

Services, San Juan, Puerto

participation and with benefit specifications in effect

from July to December, 1974, and January to June, 1975,the nominal value of the Program was put at $640.6 million in

fiscal year 1975, with participating families paying $198.3

niillion for the purchase of the stamps and receiving an ag gregate net benefit of $442.3 million.

It appears that these estimates were not too far off.

For available data on authorizations to purchase.i/indicate

that from May to December 1975, on the average, 375,464 fam

ilies participated in the Program with payments of $15,521,800 for stamp allotments of $58,904,366 yielding them a net bo nus of $42,382,486.

This would put the annual value of the

Program at $706,852,392, with families paying on the average 28 cents for each dollar of food stamps purchased. The average figure of 375,464 families is almost iden

tical to the figure of 374,056 families estimated previously

1/ Because of accounting procedures, there may be diver gences between the value of authorizations to purchase stamps and the actual value of stamps purchased.

authorization to purchase issued on the last day of a month, for example, will be reflected as a stamp pur chase in the following month, in all probability these divergences are small and cancel one another out when the average of a period is considered.

as likely to participate in the Program.

Therefore it also

represents 75 percent of the eligible families.

The differ

ence in the aggregate nominal value of the Program can be explained largely by the new increments in stamp allotments effective as of July 1975.

Judging by these figures, the impact of the Program on

the local marketing system should be rather

significant.

The injection of a large quantity of money into the Puerto

Rican economy, equivalent to 7.2 percent of its gross prod uct in 1975, with the specific objetive of raising the food purchasing power of consumers, undoubtedly will increase the demand for food as well as for non-food items, since

part

of the cash resources previously allocated to food

are likely to be used for the purchase of other items and since multiplier effects are likely to result from such pur chases.

An idea of the aggregate impact of the Program can be obtained from the findings of the surveys conducted by the Puerto Rico Department of Commerce among food stores over

the island.

These indicate the powerful initial impact the

Program has had in the three stages of its implementation. In the first month of the first stage of the Program, sales 13

of 15 supermarkets in the five municipalities within the

Stage One Area J/ had risen by 22.2 percent over the pre vious month; 15.7 percent of this increase was attributed

to purchases with stamps.

Admittedly the rise was consid

erable, especially since the food price index, as compiled by the Puerto Rico Department of Labor, had increased by on

ly one percent in the same month.

Between July and November,

1974, food purchases with stamps in this area had risen by 3.5 times in nominal terms and 3.3 times in real terms.

During the same period, total sales had risen by only 8.1 percent in real terms.

The share of purchases made with stamps in total sales

had risen from 12.8 percent in July 1974 to 36.1 percent in September and 39.6 percent in November.

In the second and

third stages of the implementation of the Program, sales of 227 sampled food dealers had risen by 18.7 percent from October to November, 1974.

About 89 percent of this in

crease was attributable to sales with stamps.

in these

stages too, then, the initial rise was considerable, espe cially since food prices rose by 2 percent from one month

Municipalities of Aguadilla, Aguada, Anasco, Moca, and Rinc6n.

to the other.

These figures represent only an approximation of the magnitude of the initial impact of the Program and are bound to have adjusted to more moderate levels after the

Program's entry into full operation.

The Department of

Commerce is currently updating its surveys of food dealers; the results, however, are as yet unavailable. A recent study, unrelated to this report, has used a

simple model of a two-good economy - food and non-foodwith data relating to participating families and has made a preliminary attempt to estimate

the effect of the Food

Stamp Program on aggregate spending and the allocation of

the supplementary income generated by the Program on these two goods by household size and income level.

It con

cludes that:

(1)

On the whole Food Stamp Program participants would

allocate 40 cents of each supplementary dollar to the pur chase of additional food and 60 cents to non-food items.

(2)

Given the assumptions, participants would consume

S. Andic and P. Choudhury, "A general Methodology for the Measurement of the Impact of the Food Stamp Program on Aggregate Demand" (See appendix). 15

on the whole 29.6 percent more food and 1.6 times more non

food than in the absence of the Program. (3)

Participants could generate an additional demand

for food at the annual rate of $182 million and an addi tional demand for non-food items at the annual rate of

$279 million.

These represent 11.4 percent and 6.1 percent

of the consumer spending on the respective items in the fis cal year 1975.

(4)

In consequence there could be an overall increase

in consumption expenditures in 1976 of about 7.4 percent, not taking account of the recovery signals in the economy. (5)

The relative importance of food in total consump

tion expenditures would rise by one percentage point, from 25.7 percent to 26.7 percent; in other words, there would

be no significant shift in the structure of aggregate spending as between food and non-food.

An additional forecast of the previous study was that the food price index would rise to 182.9 (1967=100) by 1975. In fact it rose to 190.6.

in addition, as was also fore

casted, shortages were observed in commodities such as rice,

beans, fats and oils, dry codfish, and vegetables, all of

which are items of low price elasticity.

These estimates and observations pointed to the need

for a detailed empirical assessment of the impact of the Food Stamp Program, without which guidelines cannot be for

mulated for policy decisions regarding the marketing system

in general and the food distribution system in particular. It was with this assessment in mind that the present study was undertaken.

The objective is to investigate the mar

keting structure and patterns of consumer spending on food

in the absence of the Food Stamp Program and then to con

trast the findings with the marketing structure and spending patterns that emerge after its implementation.

The differ

ences between the post-and pre-Program patterns then indi cate the observed size and direction of change in food

wholesaling, retailing,and consumer expenditures on food due to the Program.

Implications can then be drawn as to

the relevant policy actions to be taken.

The study, accordingly, has been carried out in two stages:

pre-and post-Food Stamp Program.

two components:

Each stage has

food wholesalers/retailers and consumers.

In each stage surveys are conducted among the participating food dealers and a sampled group of households in three com munities of Puerto Rico which are considered to have repre-

sentative participating families with low, medium, and high incomes.

The surveys of the second stage have been

conducted approximately one year after those of the first

stage for three important reasons.

First;

any program of

this nature and magnitude, being implemented for the first time, is bound to encounter difficulties of operation (all

eligible families may be unable to register; the adminis trative machinery may not be set up in time and correctly

to meet all the requirements; shortages of personnel; phys ical unavailability of stamps on the Island may hinder the right amount of sales of coupons; etc...).

A certain a-

mount of time has to be allowed for such impediments to be

eliminated and for the Program to begin to operate fully. Second:

there is the question of seasonality in economic

transactions.

The same respondents need to be interviewed

in approximately the same month so that inferences are not

biased by seasonal changes.

Third;

the stipulations of

the Food Stamp Program are revised periodically,

it has to

be ensured that all respondents are subject to the same stip ulations regarding benefits, etc.

eligibility, maximum monthly income,

Otherwise inferences cannot be generalized,

The present study refers to both stages of the anal

ysis. ^ Briefly, it interprets and compares the results of the surveys conducted before and after implementation

of the Program in the municipalities of Moca with low in come, and Guayama and Barrio Obrero with somewhat higher

family income levels.

On the one hand, it analyzes the

food sales at the retail and wholesale level and the pro

file of the food distribution system.

On the other, it

provides the social, economic, and demographic profile of the households participating in the Food Stamp Program;com

pares the type, quantity, and prices of food items purchased with food coupons and those purchased with cash; and assesses the magnitude of the Program-induced expenditure changes.

The detailed results of the initial surveys were elab orated in USDA/FNS and the Department of Social Services, Commonwealth of Puerto Rico, The Impact of the Food

Stamp Program Upon the Food Marketing System of Puerto Rico (Second Part), San Juan,Oct. 1975 (mimeo).

Ill

THE METHODOLOGY

The objective of the study is to assess the economic impact of the Food Stamp Program; to examine quantitatively the influence of the Program on household food expenditure

behavior.

One hyphotesis is that since the beneficiaries

of the Program are concentrated in the lowest income brack ets, the income elasticity of food expenditures will be found to be greater than unity and can be expected to vary somewhat from the income elasticities estimated in the first

report with aggregate data relating to the entire island.-^ A related hyphotesis is that income elasticity of food varies inversely with changes in income.

Granted, the con

tents of the basket change as families move up the incone scale and income elastic food items are added to consump

tion.

Moreover, the income levels of the households surveyed

in this study are sufficiently low to make this change in coefficients of elasticity imperceptible.

Choudhury, op.cit., Table VI-9. 20

Nevertheless, to

verify the existence, if any, of such a change is useful, for if relatively reliable coefficients can be estimated

which relate the additional income emanating from the im

plementation of the Program to additional food expenditures in general and to additional spending on specific food items in particular, specific public policy measures can be better formulated to counter the undesirable impacts of the Pro

gram and to prevent obstacles to its smooth operation.!/

This point brings us to the third hyphotesis, namely, that when demand for food rises because of the injection of substantial sums of money into the economy, it is to be ex pected that food prices will rise.

Granted, the rate of

increase hinges upon the elasticities of supply, which are

determined basically by producers' reactions to changing prices as well as by numerous institutional factors governing

It should be noted that the measurement of income elas

ticity for food with the Food Stamp Program acquires a different dimension than the measurement of income elas

ticity for food in the absence of the Program.

For bonus

stamps are restricted to purchases of food and the bonus

declines with income.

The traditional concept of in

come elasticity with full discretionary power over added income is no more applicable. The analysis has to be

restricted to the differential general purchasing power that emanated from the Program, and the concept of elas ticity has to be interpreted within this limited context. 21

the marketing of commodities.

In an open economy with re

gional, rather than national, characteristics, producers' reactions, however, are not expected to cause the severest bottleneck, since over half of the food consumed on the

island is imported almost entirely from the United States.

More serious obstacles can be expected from the imperfections in the local market.

The present report attempts to quan

tify the average prices of a number of food items as re vealed by retailers and wholesalers in their response to questions relating to their monthly sales, and to gauge their self-assessment as to the capacity to meet the re

quirements of expanded sales against actual results. information serves two purposes.

This

For one, since it has

been gathered on practically the same list of commodities at the retail and wholesale level, it gives the difference

between the prices of the two.

Secondly, since it has been

gathered at two points of time, the price impact of the Program can be evaluated and the self-assessed capacity to

handle expanded sales can be verified.-^

Undoubtedly, errors will have been committed on the interviewers' part as well as by respondents in gather ing information on monthly sales and quantities which

A fourth hyphotesis is that the Food Stamp Program

will have reduced the inequity of the distribution of in come among households to which the questionnaires have been

administered.

The expectation is self-evident, being sim

ply founded on the stipulations of the Program which recog

nizes

greater net benefits to lower income families in

proportion to their income.-^ A.

Selection of Areas

Since the surveys cover both food dealers and con

sumers, an integrated set of socio-economic criteria and marketing features were utilized for the selection of the areas which would be representative of the different condi

tions of the Island and which could lead to general inferences. The intention was to select areas representing low, medium.

are used to determine average prices. Since the same respondents are interviewed in the post-Food Stamp

Program surveys, it is quite likely, though not certain, that errors will have been consistent and hence the im

pact of the Program not erratically biased.

It is estimated that if the Food Stamp Program were applicable in Puerto Rico in 1969, incomes would have

been more equitably distributed among families,for the Program reduces the Gini coefficient from 0.53 to 0.48.

See S. Andic and P. Choudhury, "Direct Subsidies and Income Redistribution: The Food Stamp Program in Puerto Rico, "(forthcoming).

and higli income groups.

Data from the 1970 Census were

used in the selection process. With respect to socio-economic

characteristics, the

76 municipalities

were first analyzed according to their

median family income; the deviation from the Island mean

was calculated and a weight was given to each municipality according to its rank, in ascending order to these devia tions.

The algebraic sign of the deviations was relevant

in determining whether or not the municipality had a higher

median family income than the average for the Island; it

was irrelevant in the ranking.

The important thing was to

select an area from each extreme end and one close to the

mean.

Secondly, the municipalites were analyzed with respect to the number of families living within their boundaries.

U.S. Department of Commerce.

Bureau of the Census,

Census of Population 1970 - General Social and Economic Characteristics, Final Report, Puerto Rico PC(1)C53. Washington, D.C., U.S. Government Printing Office 1972, Table 43.

There are in reality 78 municipalities.

But at the

time of the survey, information on two (Florida and

Can6vanas) was not given separately in the 1970 Census. For the purpose of the study areas they are part of Barceloneta and Loiza, respectively.

The same procedure of ranking the deviations from the mean

was used.

Obviously, the higher the rank, the greater the

concentration of families (as compared to the mean of the

Island), which combined with the ranking of the deviation from the mean of the

median family income (and considering

the algebraic sign of the deviation) gives an indication of the relative economic status of the municipalities.

Thirdly, these two steps of the analysis were comple

mented by ranking the number of housing units in each municipality according to their deviation from the mean.

Undoubtedly, the criterion is closely related to the number of families, and again, combined with the first criterion of the level of family incomes, helps select the represent ative areas of low, medium, and high incomes.

The fourth criterion was the percentage of families

below the poverty level as defined in the 1970 Census of

Population. Again, the purpose was to select one municipal ity from each extreme end of the deviation from the mean and one close to the mean.

A large negative deviation from

the mean indicates a high income area and a large positive deviation a low income area.

These four criteria were applied separately to two

groups of municipalities.

The first group consists of the

five municipalities where the Food Stamp Program was ini

tiated in July 1974. The purpose was to select the repre sentative low income municipality, since the region was

considered to have relative poverty but with relatively easy access to relatively modern marketing facilities. From

the remaining 71 municipalities, two were selected to rep resent medium and high income areas. The municipality selected to represent low income areas was Moca which ranked quite low in median family income (i.e. high in the deviation

from the mean) and high in the percentage of families below

the poverty line (57 and 60, respectively). Although the

municipality of Rinc6n had higher rankings with respect to the number of families and housing units, the income and pov erty criteria were deemed more important and Moca was se lected.

If it were only for the socio-economic factors that give it the characterization of relative poverty, Moca would not have been selected. For the municipalities of Orocovis, Jayuya, and Marioao in the Central Plateau of the island were

more representative of the existing economic poverty. How

ever, the ultimate objective of the study was to gauge the 26

impact of tTiÂŠ Food. Stainp Pirograiti? and foir this impact to occur and, therefore, to be observable and measurable, the area where the surveys were conducted must have facilities

which assure a quick response to the implementation of the

Program. This is the reason why additional criteria relating to marketing features were taken into consideration. These were: the degree of modernization of food stores, adequacy of transportation, relative ease of accessibility to towns

where modern food stores were available, and intensity of urbanization. (Obviously all are interrelated). For, if demand were to rise and the pattern of demand were to change

because of the Program, marketing facilities must be rela tively accessible to meet this change and for the survey

to capture it in increased transactions, orders,inventories, warehousing, organizational changes, etc. By these criteria

the three central municipalities could not qualify the same

way that Moca would with its marketing outlets and its ac cess to modern food distribution systems in the adjacent municipalities of Aguadilla and Mayaguez.

The two other areas selected were Guayama and Barrio

Obrero in San Juan. Guayama showed very small deviations from the mean in each of the four socio-economic criteria; 27

in addition, it is a town with its own modern marketing fa cilities, with a certain intensity of urbanization because

of the several industrial plants established close by, and because it has access to the marketing outlets of Ponce,

the Island's second largest city.

It was, therefore, taken

to represent medium income areas.

Undoubtedly, San Juan is the highest mean income munic

ipality of Puerto Rico; it is also the largest.

But there

is a wide variation in the level of average family income

in its individual areas. Obviously, a sample survey cov ering the entire municipality would not have made much sense.

Consequently, the area of Barrio Obrero was se

lected where based on personal knowledge of the char-

scteristics of the area, it was assumed that the average family income would be higher than in Moca, but at least

similar to that of Guayama and not high enough to exclude . . the families from the benefits of the Food Stamp Program.1/

In short, surveys of whosalers, retailers, and con

sumers were conducted in Moca, Guayama, and Barrio Obrero of San Juan.

In Moca the surveys were conducted in June

It should be noted that Barrio Obrero covers five Census Tracts (32, 33, 36, 37, and 38). 28

1974; in Guayama and Barrio Obrero in October 3974, in the month prior to the initiation of the Program in all three areas.

According to the 1970 Census, Moca is a municipality with a population of 22,361 persons (0.82 percent of the total

population of Puerto Rico) and 4,766 families (0.70 percent of the total).

The average family income is $2,186 per

year, which is about 38 percent of that of Carolina, the municipality with the highest average family income, and about 56 percent of the average family income of Puerto

Rico.

Guayama has a population of 36,249 (1.34 percent of

total) and 8,598 families (1.26 percent of total).

The

average annual family income is $3,506 which is 60 percent

of that of Carolina and 90 percent of the Island's.

Barrio

Obrero has 20,390 persons (0.75 percent of the total pop

ulation) and 6,115 families (0.89 percent of the total). The average family income is $3,490 a year, quite similar

to that of Guayama. The three areas thus represent 2.89 percent of the total population and 2.85 percent of the to tal families of Puerto Rico.

Selection of Samples 1. Food Retailers and Wholesalers

The surveys of food retailers and wholesalers were con

ducted by the Puerto Rico Department of Commerce which can vassed the three study areas street by street indentifying the businesses.

All in all, 190 food retailers were iden

tified; 53 in Moca, 77 in Guayama, and 60 in BarrioObrero.^ The total number of wholesalers was nine:

one in Moca, six

in Guayama, and two in Barrio Obrero.

The questionnaires, once completed by the staff of the Department of Commerce, were handed over to the Food Stamp Marketing Study Office for tabulation and analysis.

Exam

ination of the responses to the questionnaires revealed that some of them did not contain complete information.

Return

visits were made to the dealers to check and verify the information, to get the lacking data, and to locate some of the dealers which previous repeated efforts were unable

to do.

Ultimately, some of the questionnaires had to be

discarded from the analysis: it was impossible to locate

The 1972 Economic Censuses of Outlying Areas (U.S. Department of Commerce, Bureau of the Census, OAC72-1,

Washington, D.C. 1975) give higher figures for 1972: 137 in Moca and 96 in Guayama.

The reason for the

discrepancy is unknown. (Barrio Obrero is not captioned separately in published Census statistics,since it is not a municipality),

the business or it appeared to be continuously locked up; the responsible person to provide answers was continuously unavailable; the reliability of the infomnation could not

be improved; information could not be obtained in the classification suitable for comparative analysis; or the

business (usually a small one) was not interested in coop-

y erating.

In one case in Guayama what appeared to be a

2/ retail bakery was revealed to be a manufacturer.

summary of the number of businesses whose responses in 1974 were analyzed is given in Table lll.l. Table III.l:

Number of Wholesalers and

Retailers in the 1974 Surveys

Wholesalers

Municipality

Included

Discarded

Retailers Included

Moca

Guayama

Barrio Obrero

Total

Dis carded

171

The Food Stamp Marketing Study Office was able to get the cooperation of some of these at a later stage with information corresponding to June and October 1974.

Although there appear to be two food wholesalers in Barrio Obrero, one is an old business whose owner is

The 1975 surveys were conducted by the Puerto Rico

Department of Social Services.

Responses were sought from

the same businesses who had valid responses in 1974. interviews with wholesalers presented no problems.

The

In the

case of retailers it was impossible to locate some of the

owners despite repeated visits; some stores had closed down because of sickness; some were not accepting food stamps and therefore refused to cooperate or were ignorant of the amount of sales; in other cases information was incomplete

and efforts to obtain the missing information proved to be

fruitless.

Consequently, the 1975 responses were obtained

from the same eight wholesalers, while the number of re tailers was reduced.

Table III.2 gives the number of busi

nesses whose 1975 responses were taken into consideration. Table III.2;

Number of Wholesalers and Retailers

in the 1975 Surveys Wholesalers

Municipalities

Included

Discarded

Retailers

Included

Moca

Guayama

Barrio Obrero

Total

Discarded

155

an old-age pensioner who is just waiting for a prospec tive buyer to come along. Thus,it is discarded from the crucial portions of the analysis.

Households

'rhe random selection of households was made from a uni

verse of families whose eligibility was already certified in each area.

There was, thus, reasonable assurance that

interviewed families would participate in the Food Stamp

Program once it was initiated; that the sample would cover

active cases in the post-Program stage of the analysis; and that the comparative analysis of the pre and post-Program

survey results would lead to an effective assessment of the Program.

The minimum number of families that had to be included

in the samples of each area was 150."^ A higher figure was aimed at and the statistical random sampling technique used yielded a great deal more than the required minimum.

the households in the sample were visited once.

All

If the first

attempt to contact the household proved to be unsuccessful, no return visit was made.

In 1974 a total of 575 households were interviewed: 199

in Moca, 205 in Guayama, and 171 in Barrio Obrero.

_1/

They

USDA/FNS, Quality Control in the Food Stamp Program. FNS (FS)

Instruction 732-2, Washington, D.C., 1971,

Appendix A.

represented 5.1 percent, 3.8 percent, and 4 percent, respec

tively, of families in the 1970 Census who were estimated as likely to be eligible for the Food Stamp Program.

1975, attempts were made to contact 562 (575-13=562, see

Table III-3) households but only 523 of them could be in terviewed: 193 in Moca, 183 in Guayama, and 147 in Barrio Obrero.

They represented 5 percent of eligible families

in Moca, and 3.4 percent in Guayama and Barrio Obrero.

the total 575 responses in 1974, 13 had to be discarded because of their incompleteness and apparent errors.

The

number of interviews not completed in 1975 was 40, mainly because the families had moved, and the respondents to be

were not at home.

Table III.3 summarizes the response rates

to the two surveys. C. The Questionnaires

Identical questions were posed to retailers and whole

salers.

The 1974 questionnaire was basically the same one

employed by the Puerto Rico Department of Commerce for its

periodic surveys of commercial activities, it was expanded to obtain additional information on quantity and value of monthly sales by groups of products so that estimates of

average prices could be obtained and compared with similar 34

(ji

195 184

5.1 5.0

199 193

93.3

202 162

3 21

3 3

205 183

63.2

5,431

Guayama

likely to be eligible.

137

165

6 10

4.0 3.4

171 147

70.0

4,280

Barrio Obrero

Estimated from Puerto Rico Population Census, 1970 as

1974 1975

Sample Size

1974 1975

Interviews discarded

families

Percent of eligible

Families surveyed

Percent of all families

3,897

Moca

Household Sample Size, 1974 and 1975

Total eligible familiesâ&#x20AC;&#x201D;'^

TalDle III.3:

562 483

13 40

4.2 3.8

575 523

74.0

13,608

Total

estimates from the 1975 surveys.

It included questions as

to the kind of business by SIC categories, types of food products sold, physical size of establishment, employment,

building ownership, monthly rent and payroll, type of ac counting system used, capability of coping with expanded sales, and the amount and type of assistance required for

an effective participation in the Program. ^

1975

questionnaire was basically the same except for questions

on effective participation in the Program and its reasons, and the respondent's estimation of the impact of the pro

gram on his business:

expansion of store size, purchase

of new equipment, use of public or private credit facili ties, costs of operation, number of persons employed, in crease in sales, proportion of sales with food stamps,etc...

Information obtained in the interviews basically refers to the month prior to the interview.

Weekly information.

The questionnaire was designed to provide information on the occupational breakdown of employees (such as butcher, cashier, baker, manager, etc...). This infor mation was not sought after, and if provided was not

taken into consideration in the analysis of the results

Furthermore, the Puerto Rico Department of Agriculture added questions on purchases of agricultural produce by supermarkets to identify sources of supply, but answers to this query were neither sought after nor produced.

wherever provided, was converted to monthly rates using a multiplication factor of 4.3.

Fortnightly information

was taken to refer to 15 days and the figures were multi

plied by two. Questionnaires administered to the households included

socio-demographic as well as economic questions.

Questions

common to both surveys refer to the size of the household, age, sex, and marital status of the head as well as of

family members, monthly income of the household (the total sum of the receipts of all income earners), employment sta tus of the head as well as of members, educational level,

global expenditures on food and non-food items, and detailed expenditures for food

items.

The 1974 surveys inquired

into attitudes as to type of food products the household would purchase if it had additional income, so that answers

could be contrasted with responses to the 1975 survey on

the actual additional expenditures resulting from the sup plementary incane provided by the Food Stamp Program.

In addition, the latter survey inquired into actual

participation in the Program, amount of stamps purchased

monthly, type of food stores frequented, and the respond ent's evaluation of the comparative benefits of the Pro-

gram. Monthly income reported refers to cash income for the month prior to the interview, information on the source of income# such as public assistance and welfare#

was not sought.

Expenditures refer to those made in the

week prior to the interview and were converted to monthly rates.

THE ANALYSES AND RESULTS:

FOOD MARKETING

This section of the study siammarizes the findings

the surveys among food dealers.

Findings related to food

marketing at the retail level are discussed first, followed

by those related to wholesale trade.

The next section gives

the results relating to households, which are also used to

run regression equations to estimate income elasticities of individual income categories. tation are discussed A.

These and their interpre

subsequently.

Retail Outlets

As mentioned previously, the analysis of retail food outlets is based on responses from a total of 171 establish ments in 1974 and 155 in 1975.

establishments, IV-1.

The distribution of these

by type of store, is presented in Table

It is interesting to note that there has been a

shift towards mixed stores, which are grocery stores where alcoholic beverages can also be purchased for consumption

on the premises.

A comparison of identifiable businesses

indicates that 38 stores classified as grocery stores in

1974, have become mixed stores in 1975 (while ten classified as mixed are registered as grocery stores). Table IV.1:

Food Retail Outlets, by Kind of Business

Kind of Business

1974

1975

Grocery Stores

Mixed Stores

Supermarkets

Meat & Seafood Markets

Fruit Stores, Vegetable 13

Retail Bakeries

Other

171

133

Markets

Total

There were no supermarkets there still are none in 1975.

in Moca in 1974, and Moca is an agricultural town

sandwiched between the cities of Aguadilla and Mayaguez

(that have a total of 10 supermarkets); Mayaguez has a re

cently completed extensive shopping center.

Barrio Obrero,

with no supermarket in 1974, is a pocket in a metropolitan area with 65 supermarkets.

Nevertheless, one retail outlet

As of June 1975; supermarkets are defined as food retail outlets with annual sales of one million dollars or more. Source; Puerto Rico Department of Commerce, Division of Economic Planning.

recorded as a grocery store in 1974 "had increased its sales

over the year and thus qualified as a supermarket in 1975. Guayama's position is similar to that of Mayaguez in that it serves as a service center for a number of nearby munic

ipalities, in addition to having experienced in the past a

great surge in economic development with the establishment

of petrochemical plants and other manufacturing operations and their concomitant urban sprawl and service requirements. However, what can be a boon to families and businesses can

also be a source of distress, for it is precisely this area

which has suffered greatly from the past recession with un

employment in the area having reached 38 percent in September

1975. ^ This, no doubt, has had a dampening effect on the growth of food sales. (There still are two supermarkets in

Guayama, one of which did not cooperate in the 1975 survey). In terms of numbers, grocery stores and mixed stores

prevail in all the three municipalities; 130 out of a total of 155 establishments.

More than two thirds have monthly

gross sales of 4,000 or less. In Moca, all retail food out-

United States Department of Labor, Manpower Administra tion, Bureau of Employment Security: Review, October 1975.

Area Manpower

lets consist of such stores, with only one bakery which is the vertically integrated extension of the manufacturer lo cated in the municipality. All food retail outlets are urban in Barrio Obrero.

While, corresponding to the area's economic features, about three-fourths of those in Moca are located in rural areas

and about one-half of those in Guayama.

Nevertheless,

sales of rural food outlets are only about one-half of to tal food sales in Moca and about one-fourth in Guayama,for all rural establishments are small.

In 1974 their monthly

gross food sales did not exceed $7,000.

Of the 34 rural

stores in Moca, 16 have declared gross monthly food sales of $1,000 to $2,000, and all but one of these sixteen are

owned and managed by their operators, with only one of them employing one employee.

The situation is reversed in Guayama,

where in this sales size there are 14 urban stores and five

rural ones, and all of the latter are manager-owned. An increase in sales volume of rural stores is observed

in 1975, for nine rural stores in Moca have reported gross

monthly sales of $5,000 or more and five in Guayama have reported monthly gross sales of $7,000 or more.

Only part

of this shift can be explained by higher food prices; the

rest should represent expanded sales volume.

In fact, the

Food Stamp Program has been accepted by most of the retail outlets, since 141 out of 155 establishments are currently participating in the Program, most of them for over a year.

Very few do not sell food with stamps, mainly because they are not interested, since they do not sell very much (these

are in the monthly sales group of $1,000 or less).

One

food retailer responded that he did not know where to apply, and another that he received no reply to his request.

though both are in the lowest monthly sales size and are

insignificant within the retailers* group, the cases merit

the attention of the appropriate public agencies whose aim

is to reach all outlets, big or small, that can be potential participants in the Program.

Responses to the pre-Program questionnaires had revealed that food sales par establishment were the highest in Guayama.

The tendency was for average sales to rise with increased sales size.

Sales per square foot of store area were com

parable between Guayama and Barrio Obrero, but lower in Moca.

A clear-cut relationship was not discernible between

individual monthly sales size and sales per square foot as

one moved up the sales bracket. However, over the entire 43

range, sales per establishment in the highest sales

size

were 43 times those of the lowest size, while the store

area per establishment was five times higher.

The ratios

were 74.9 in Guayama and 57.6 in Barrio Obrero.

Responses to the second set of questionnaires affirmed what was revealed in the first set, namely, that sales ca

pacity could be expanded without having to increase physical capacity.

In the overwhelming majority of the cases in the

three municipalities, store owners and/or managers consider that there have occurred no need for expansion in store acea

(for storage as well as sales), and that increased sales

have been successfully handled with the existing physical

capacity.

The few expansions recorded in physical space

ocurred mainly in storage area (rather than sales area)and

mostly in outlets with relatively high monthly food sales, in 14 cases, the specific location of the outlet was cited

as an impediment to physical expansion to meet increased sales.

in much the same way food retailers have not found it necessary to purchase new equipment in order to meet the

expanded sales they expected and realized, except for those whose monthly sales are in the two top brackets.

Although

a year earlier they had found it desirable to

get educa

tional assistance on Program benefits and in the proccesing and handling of coupons, as well as financial assistance,

especially to increase inventories, the majority of them did not ask for it, and the few small size outlets that

did claim that they got no response to their petitions from the government.

In 1974, employment in the 171 establishments surveyed had totalled 422 persons of whom 198 (47 percent) were sal

aried.

In 1975 there appears to be a higher rate of sal

aried workers (202 persons, representing 49 percent of

employment) working in a smaller number (155) of establish ments.

Seventeen establishments reported increased employment

totaling 29 persons among whom 26 were salaried. As expected, the concentration of salaried employment is in establish ments with large sales, while non-salaried employment is concentrated in stores with sales of up to $3,000 a month, in 1974, average monthly salary ranged from $295 in Moca to

$330 in Barrio Obrero

and $350 in Guayama; in 1975, the

averages have risen to $320, $370,and $380, respectively.

These averages are in fact largely determined by the estab

lishments with the largest sales ($10,000 or more a month), 45

that employed almost 70 percent of all salaried personnel

in 1974, and 74 percent in 1975. increase of only

Yet, this amounts to an

about 10 percent in labor costs which may

explain why the respondents do not think of the Food Stamp Program as having caused operational

expenses to increase.

Rather, the two outstanding factors mentioned were increases in electricity and water rates.

But these have no direct

bearing to the Program; they are the result of the oil price increases and the new installations made to meet environ mental quality standards.

The Food Stamp Program have not had much impact on the

accounting system used by the respondents, except for the documents required by the Program.

There does seem to be

a small shift towards use of accounting books as compared to 1974.

Only about two-fifths of the retail outlets sur

veyed reported having filed income tax returns.

Table IV.2 reveals the increases in monthly food sales

that the areas have experienced since the Food Stamp Pro gram.

The growth has been dramatic in Moca and Barrio

The questionnaires queried the food sales in two ways, One was by directly asking the respondent the sum to tal of his food sales in the month prior to the date

Obrero, where sales have increased by $86,547 and $257,285, respectively, representing an increase of 53.3 percent in the case of the former municipality and 92.2 percent in the case of the latter.

In relation to the bonus dollars issued,

the increase in aggregate

food sales represents 18.5percent

of such dollars in Moca, while it surpasses the bonus value in Barrio Obrero (see Table IV.2).

The dramatic growth per

sists even after accounting for price 3jevel changes.

Table IV.2;

Retail Food Sales, May/September 1974-October 1975 (dollars) Barrio

Moca

Guavama

162,376 248,923

460,106 502,534

Obrero

Total

In current prices 1974 1975 Percent increase

53.3

9.2

279,076 536,361 92.2

901,558 1,287,818 42.8

In constant prices 1975

224,054

Percent increase

Bonus Stamps

38.0

461,139 0.2

467,103

697,003

492,214 76.4

251,265

1,177,401 30.6

1,415,371

Increase as percent

of bonus

18.5

6.1

102.4

27.3

Deflated by the food price index of the Puerto Rico Department of Labor.

of the survey; the other was by gathering detailed in formation on sales of individual food items.

The s\im

total of the latter does not necessarily equal the direct response.

The situation is quite different in Guayama.

This

municipality has been severely hit by the economic recession of recent years; the unemployment rate being 38 percent in

September 1975, as mentioned previously.

Consequently, re

tail food sales have risen by ?42,428 in current prices and have kept their level in 1974 prices.

The increase is

only 6.1 percent of the bonus dollars issued in October

1975, which implies that they have mainly provided the in

come through which a sharp decline in food sales has been prevented.

In Moca the retailers estimated a 50 percent

increase in their sales over the year, and the detailed in

formation they gave on their sales corroborated their esti mate.

In Guayama, the dealers were more optimistic than the

detailed information indicated; and in Barrio Obrero, they underestimated the expansion in their sales by almost onehalf.

The overall increase in monthly food sales in the three areas combined is $386,260, which represents 27.3 percent of the bonus dollars issued in October 1975.

This percent

age is one-third that of Puerto Rico as a whole; for between fiscal year 1974 and 1975 food consumption in current prices

on the Island rose by $253 million, from $1,344 million to

$1,597 million million.

and in 1974 constant prices to $1,460

The value of bonus stamps issued in fiscal year

1975 is estimated to be $327.9 million,-^which implies that the increases in food expenditures over the year has been about 7.2 percent of the bonus dollars in current prices

and about 35 percent in constant prices.

Part of the ex

planation of this large difference between official statis tics and survey results lies in the fact that in the initial months of the Program the implementation was rather gradual and hence not all eligible families were sucessfully incor porated into its network.

This is especially true for the

months of July to September 1974.

Yet, the second set of

surveys relating to retailers (the results of which are given in Table IV.2) was conducted in October 1975, i.e.,

during the first half of fiscal 1976.

Hence, a comparison

of the changes in food expenditures between the three mu

nicipalities and Puerto Rico as a whole is not quite

war

ranted.

Puerto Rico Planning Board, Economic Report to the Governor, 1975

The sum total of monthly bonus stamp issuance from July 1974 to June 1975 (incl.). 49

Anotiier point that needs to be brought out, is that

the classification of sales by food product categories is not identical in the 1974 and 1975 surveys; the latter in clude a number of items such as soft drinks, TV dinners,

and others, which were omitted in the initial surveys.

somewhat different picture emerges if the 1975 sales are adjusted for the absence of such items and then compared with the 1974 figures-

IV.3.

The results are summarized in Table

Accordingly, the rates of expansion in Moca and Barrio

Obrero still remain quite substantial, though drastically

reduced, in current as well as constant prices.

In Guayama

sales declined by 1.3 percent in current prices and by 9.4 percent in constant prices.

Although no conclusion can be

drawn as to what the rates of change would have been if these

items were included in the initial surveys,

it can be said

quite confidently that in Guayama the impact of the recession has been so severe that even the Food Stemip Program has been unable to maintain food consumption at its pre-Program level. The two most important impediments to sales expansion,

reported by the food retailers interviewed, are inadequa cies of the wholesale distribution system and insufficiency

of working capital (39 responses in each case out of a total

a/ See Table IV.2

1975 Percent increase

416,714 -9.4

30.2

-1.3

41.9

211,439

260,106 456,218

162,376 230,468

Moca

Guayama

1,080,184 19.8

61.8

29.8

74.0

451,572

901,558 1,170,278

Total

279,076 485,592

Barrio Obrero

RETAIL FOOD SALES (IDENTICAL ITEMS) MAY/SEPTEMBER 1974-OCTOBER 1975 (DOLLARS)

In constant prices

1975 Percent increase

1974

In current prices

Table IV.3:

of 118).

The general reaction was that wholesalers either

do not supply in sufficient quantities (25 responses), or are late in delivering (14 responses).

With respect to

the latter response, it is interesting to note that when

confronted with the question as to whether or not they had requested assistance from the appropriate public authority

to finance inventories, six

answered that they were not

interested in such assistance and eight that they had not requested it.

More interesting, however, is that ten did

not know which agency to apply to, nine were denied the assistance requested, and only one (in Moca, with monthly

sales of $1,000 to $2,000) was granted the request.

Equally

interesting is a third response (26 out of 118) relating to the strong competition food retailers are facing. Understandably, all these responses come from small size outlets with monthly sales of $4,000 or less. Located in

areas in an around which sufficient numbers of large retail outlets operate, it was to be expected that food purchases

with stamps and the general purchasing power the Program generates would cause the small retailers to lose out to

the large ones with greater and quicker expansion facilities and a greater variety of goods.

This is borne out by a

comparison of the statistics on the size distribution of the monthly food sales in 1974 and 1975 in the individxaal areas given in Table IV.4.

The increased concentration of gross sales in stores

with monthly sales of $15,000 or more is quite evident from Table IV.4.

Two-thirds of the sales in Barrio Obrero, eg.,

are accounted for by five stores in this sales group which barely constitute one-tenth of the total retail food out

lets of this neighborhood.

The increased concentration is

only partly due to higher food prices, which according to

the Puerto Rico Department of Labor rose by 11 percent be tween May 1974 and October 1975.

Table IV.5, therefore,

compares the distribution of food retail outlets in the

three areas and their combined sales in 1975, expressed in 1974 prices, with those of 1974.

Ideally, such distribution

al comparisons should be made among equal size populations,

in our case the aggregate size of the sample is smaller in 1975 for reasons explained previously.

Nevertheless, the

number of retail outlets with monthly sales of $10,000 or more has increased from 17 to 29.

These now account for

73.2 percent of all sales as opposed to 51.6 percent; and sales per establishment in the two top groups are larger by

100.0

64.5

6J)

100.0

45.9

12.7

8.2

3.9 8.2

8.0

100.0

11.5 66.9

11.2

4.3

7.6 11.3

7.1

11.5

Total

7.0 4.7

9.8

2.2

4.0

7.4

1.6

11.6

47.5

2.4 4.7 6.3

3.6

9.2

12.0

56.1

3.8 1.9

7.5 7.4

3.7

4.1

4.7

17.6

30.4

1,000- 1,999 2,000- 2,999 3,000- 3,999 4,000- 4,999 5,000- 6,999 7,000- 9,999 10,000-14,999

100.0

1.1

3.4

5.0

1.5

1.1 6.4

1.5

8.0 6.2

2.2

Barrio Obrero 1974 1975

1975

Guayama 1974

2.8

1974

1975

Moca

15,000 or more

999

0â&#x20AC;¢

Level ($)

Monthly Sales

Table IV.4: PERCENTAGE DISTRIBUTION OF FOOD SALES, BY SALES SIZE, MOCA, GUAYAMA.AND BARRIO OBRERO, 1974 AND 1975

cn ui

- 1,000 - 2,000 - 3,000 - 4,000 - 5,000 - 6,000 - 7,000 -10,000 -15,000 or more 14.0 13.4 6.4

44.0

7.6

9.9

3.6

5.6

9.0

6.9

8.0

1.8

cent

901,590 100.0

16,114 72,004 61,857 81,571 50,369 32,829 32,698 88,903 68,936 396,309

($)

Per

155

Number

differs from that of Table IV.2.

1,264.888^

144,561 779,331

57.744

17,173 45,575 60,907 48,334 36,042 36,592 38,629

($)

Sales

100.0

61.7

11.5

4.6

3.1

2.9

2.8

3.6

4.8

3.6

1.4

Percent

The figure, therefore.

100.0

lUO

7.7

4.5

3.9

4.5

5.2

9.0

16.1

20.6

17.4

cent

Per

^ Sum total of the direct responses of the interviewees,

100.0

3.5 6.4

171

2.9 5.9

3.5

27.5

16.4

cent

Sales

1 9 7 4 Per

1 9 7 5

CHANGE IN THE DISTRIBUTION OF COMBINED

SALES^, 1974 AND 1975 (IN 1974 PRICES)

FOOD RETAIL OUTLETS:

Number

^ In .1974 prices

Total

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 10,000 15,000

($)

Monthly Sales

Table IV. 5:

4.9 percent and 27.2 percent, respectively. In 1974 prices,

overall 1975 food sales have increased by 40.3 percent-r^nd by almost 55 percent per establishment.

According to the declaration of the respondent, food sales with stamps constitute a large portion of the total

food sales:

78 percent in Moca, 60 percent in Guayama,and

51 percent in Barrio Obrero.

The lower proportion in Barrio

Obrero could very well be due to

the ease with which sales

can be shifted to retail outlets in adjacent areas; the

higher proportion in Moca, to its rural characteristics and lower incomes, i.e., the larger percentage of the population living in rural areas and the greater number of families who receive stamps.

The proportion of sales with stamps to

total food sales appears to rise with increased sales. Thus, the few large establishments that account for the largest

share in retail food sales account for an even larger share of sales with stamps.

Table IV.6 to IV.8 contain comparative information on monthly food sales by product categories in 1974 and 1975.

Sales in 1974 refer to the month of May in Moca, and Sep-

Includes a serres of items (soft drinks, TV dinners, etc.) which were not recorded in 1974.

tember in Guayama and Barrio Obrero; sales in 1975 refer to the month of October in all areas.

Table IV.6 compares

the relative importance of individual food categories in total sales; Tables IV.7 indicates the changes in quanti ties sold; and Table IV.8 compares average prices.

In interpreting the figures in the tables it should be borne in mind that the 1975 classification is not strictly

comparable with that of 1974,since the former includes soft drinks and beverages (which were excluded in 1974) which account for about 10 percent of the sales of the year. More

over, certain items grouped in 1974, are presented as indi vidual categories in 1975 (e.g. Italian pasta and evaporated milk). Commodities which are the most important in total sales are:

beef, pork, and chicken meat; milk and dairy

products; rice; tomato sauce; coffee; sugar; and starchy vegetables. As a whole they represent slightly over 69 per cent of monthly food sales in 1974 as well as 1975.

The

individual importance of each item differs, however, from 1974 to 1975, and among areas.

Overall, the relative im

portance of starchy vegetables, potatoes, rice, beans, poul try, codfish, and sugar appears to have declined while that of tomato sauce, processed meat, milk, and dairy products

Hilk, Fresh

Other Fish and Seafood Processed Eggs

Cod Pish

Pish and Seafood* Fresh and Frozen

Other Moat, Processed

Luncheon Heat

Sausage

corned Beef

Entrails

Poultry* Fresh and Frozen Other Meat, Fresh and Frozen

Pork. Fresh and Frozen

Fruits Cannec^ Frozen,or Dried Beef and Veal^ Fresh and Frozen

Fruits. Fresh

Other Vegetables, Canned .and Frozen

Tomato Sauce, Canned

Other Vegetable, Fresh

Toroato, Fresh

Deans. Frozen and Canned Onions, Fresh

Beans, other

Beans, Dried

Other Cereals

Rice

Pot&tooo

Starchy VegctablcD

FOOD CATEGOpiES

1.7

0.6

2,720

933

10,680

6.6

2.0

733

3,264

5.0

1,254

8,038

1.2

16,681

2,645

9,767 1,107

9,520 1,296

1,977

665

19,346

15,429

16,862

1,814

6.7

1.0

0.4

3.9

0.5

3.8

1.0

1.1

7.8

6.2

7.6

.3 .9

1.9

851

2,665 2,460

211

2.2 2.6

18,021

1,971 4,434

2,944 17,482

3,176 3,850

7,922 8,559

1,849

39,364 28,437 38,719 2,524

3,963

4,126

3,976

10,973

6,798

5,575 4,320

8,459

3.9

1.0

3.8

1.9

1.7

8.4

6.2

8.6

2.4

1.5

1.2

1.8

3.2

2,575

3.2

14,892

37,499 14,670

2.3 8.2

35,421 10,648

2.1

2.9 7.7

Sept.-1974 Salop($) %Diot.

GUAYAMA

32,252

4,595

3,702

11,708

3,096

13,031

3,357

9,854 2,174 12,620 2,615 36,968 26,688 26,996 2,923 1,076 4,667 4,626

3,587

2,235 4,176 4,180 2,078

8,431

11,787

6.4

2.3

0.6

2.6

4.0

5.4

5.7

7.4

2.5

2.0

1.7

2.4

1.5

6.7

9,905 7,693

33,723

2.0

Oct.-1975 Saloo (§) %Dist. 7,563 6,505

4,607 1,311 1,449 3,189 7,929 1,568 5,989 17,903

3,299 4,872

6,176 2,290 2,441 1,030 34,741 14,981 21,257 1,291

3,760

2,585 6,266 1,874 6,760 2,149 3,495

27,013

2.3

2,7

6.4

2.2

2.8

1.1

1.7

1.8

1.2

7.6

5.4

12.5

2.2

1.3

1.2

2.4

2.2

9.6

25,166

7,188

2,869 11,641 3,870 8,429 4,876

8,562

28,802 5,386 1,702 5,844

18,472

8,460 62,104

7,029

18,763 2,318 4,994 6,965 49,131 6,895

1,138

5,390 4,467

26,293

10,099 11,330

4.7

1.3

1.6

2.2

1.6

1.1

1.0

5.4

3.4

11.6

1.6

1.3

9.2

1.3

3.5

1.0

4.9

2.1

1.8

Sales{$)%Diot.

Oct.-I>75

BARRIO OBRERO

Saleolg) ^ist.

Sept.-1974

IfifiJh WTftOyKTM., W>»i TOID W7b

6.0

2,211

1,125 4,726

1,730

1,525 1,871

6,485 1,306

5,392

7,171 5,280 14,623

Oct.-1975 Soloa($) XDifl.t*

1.3

2,005 1,003

2,176

7.3

4.1

11,798

6,723 12,873

7.9

1.469

711

361

1.0

1.3

1,648

2,075

121

1.2

4.2

6,796

1,927

2.7

19.9

4,434 32,364

4^56

May-1974 Salos{$) %Di8t.

Table IV.6: FOOD RETAIL OUTLETS; PERCENTAGE ITlSTimnmttt-W -VftWWAJI ALL AREAS

1974

1975

4,272 13,707 46,609

7,387 33,449

5,510

14,970 15,171 5,490

5,148

10,919 19,869 7,201 6,567 6,482 85,903 50,141 72,849 3,815

8,526

27,954 4,570 16,887 9,799

19,182

43,442 21,587 96,896

5.2

1.5

3.7

1.7

e.i

5.6

9.5

2.2

1.2

1.0

1.1

1.9

3.1

2.1

10.B

2.4

4.8

74,099

14,428

9,685

29,923

6.262

34,192

15,848 8,203

13,176

10,460 21,860 12,889 117,934 62,589 75,144 6,310 3,444

63,711

11,677

8,369 8,802

24,464

19,383 4,679

74,839 22,569

24,303

27,175

5.8

1.1

2.3

2.7

1.2

1.0

S.B

4.9

9.2

1.0

1.7

4.9

1,9

1.5

1.8

5.8

1.9

2.1

Saloo($) %Dist. Saloo(5) %Diot.

May 1974

2.0 2.7 6.0 0.9

3,319 4,396

9,756

1,503

Oils

Coffee, Chocolate. Tea,and Other

Soups. All

Refined

8,907 4,116

3.4 1.7

Juices, Concentrated Juices, Dehvdrated Other Non-Alcoholic Beverages

Juices

T.V. Dinners

100.0 248,923

206

3,066

424

3,312

3,835

228

7,612

162,376

3,034

8,812

1.5

8.3

Halt

,417 ,4 30 ,454 ,733

3,945 e,849 11,595 2,639 1,195 1,660

339

7,333 9,666

Soft Drinks

Crackers

Bread

Other Sweets

Sugar

Spices, Vinegar, and Other

Italian pasta.Not Processed

Italian pastas,Canned and Processed

Lard

366

1.2

Other Dairy Producto Vegetable Fat

Oct. 1975

3.1

1.7

3.6

3.5

1.2

4.7

3.6

1.6

Sales ($) %Di8t«

MOCA

Salea (S) %Dlat.

132

(COHT'Dl

2,015

Evaporated Milic

FOOD CATEGORIES

Table IV.6

460,106

21,097 7,402

1,704

4,577 20,664

4,807

11,531 14,691 15,607

938

13,939

100.0

1.6

4.6

4.5 .4

1.0

1.1

3.4

3.2

2.5

3-0

Oct. 1975

1.5

5,426 4,181

7.7

38,856 6,636 21,281 8,123

502,534

8,046 1,003 7,005 2.858

100.0

0.6

279,076

1.6 1.4

1.6

4.2

1.3

1.6

1.0

100.0

•

4.1 1.0

8,900

2.4

100.0

0.5

901,558

•

1.7

3.5

1.6

14,316

5.6

5,099 31,977

6,304 50,486

4.0

1.5 1.6

1.7

1.0

37,004 .7

2.3

2.4

4.0

4.3

5.6

1.6

790

536,361

1974

SalestS)XDiot>

21,240 2,060 20,741 39,149

.7 3.2

12,984 2,788 3,634

789

.4 1.9

995

5,483 9,296

1,716 7,792 8,792 21,494 8,886

5.9

1,361 16,405

3,978 17,015 2,416 8,702 30,037 21,604 4,038 3,747 2,793

2.7

2.8 0.9

4.2

7.2

5,89i 20,062 11,641 2,590

2.7 3.0

940

0.2

2.1

5,286

3.7

747

Sales(SI %Diot.

Oct. 1975

BARRIO OBREPO

Sept. 1974 sales($1 %Diot.

17,575 18,694 2,416 13,298 14,845 14,158 4,392 4,862 2,297 8,167 13,792 3.5

Sales (S) XDiot«

GUAYAMA

Sept. 1974 Sales(S) %Diot»

1975

,287,818

4,215 13,709 3,854

24,342

189

6,740 16,684 31,900 2,691 55,555 19,544 50,387 20,844

47,357 10,469 9,804

28,086 45,375 5,171 25,945 53,731

100.0

1.1

1.9 .3

1.6

3.9

1.5

4.3

2.5

1.4

.8 .5

3.7

4.2

2.0

3.5

2.2

Salen(S) <Dlflt»

appears to have increased, in addition, the sales of fruits, fresh and processed, although relatively insignificant,have registered a sharp expansion.

This pattern is verified by the figures in Table IV.7 which indicate

a moderate increase in the quantity sold

of tomatoes and substantial declines in quantities sold of

starchy vegetables, rice, dry beans, poultry, codfish, and sugar:

this concurs with the previous statement on short

ages of selected food items.

There is not a great degree of divergence in the pattern

of consumption among the three areas in 1974. A divergence, however, appears in 1975, especially if the differential

change in quatities sold is considered. For example, there is a 1,000 percent increase in sales of starchy vegetables in Moca, while the increase is moderate in Barrio Obrero

(15.5 percent), and not so moderate in Guayama (69.8 percent).

Similarly, while sales of pork meat have increased in Moca,

they have declined in Guayama and Barrio Obrero. Obviously, however, there has been a shift towards meat products which

can be surmised from the relative increases in their quan tities. (See Table IV.7 for individual food categories). There does not appear to be a great deal of correspondence 60

No.

2,057

9,450 1,705

Other Fish and Seafood Processed

Fish and Seafood,Fresh and Frozen

391

Cod Fish

766

1,052 1,994

3,553 10,305 7,414 25,692

Other Meat. Processed

Lbs,

11,017 2,214

Luncheon Meat

Sausage

Corned Beef

Entrails

Other Meat. Fresh and Frozen

Poultry. Fresh and Frozen

Pork, Fresh and Frozen

Beef and Veal, Fresh and Frozen

Fruits. Cannec^ Frozen,or Dried

Fruits. Fresh

Other Vegetables. Canned and Frozen

Tomato Sauce. Canned

410

1,008

Tomato. Fresh

Other Vegetables. Fresh

3,524 0,799

315

2,096 27,924 141,799 4,107 14,502

May 1974

Quantity

Beans. Frozen and Canned Onions. Fresh

Beans. Other

Beans. Dried

Other Ccroals

Rice

potatoes

Starchy Vegetables

FOOD CATEGORIES X

770

8,381

1,852

1,350 2,101 2,196 1,518 8,131

10,705 23,417

14,692

- 541)

-11.4

98.2 1979.5 -9.9

10.1

99.7

-8.9

44.4

-17.3 41.5

-27.3

8.7

430.5

50.4

-29.5

6.2

1053.7

1.4

134.6

21.5 -62.7

33,940 52,916 9,637 14,709 3,634 3,743 6,203 2,720 2,175 12,842 1,610 15,576 2,930

1032.6

Chanqo

23,740

Sold Oct. 1975

27,637 5,190 19,317 17,005 8,136 15,760 31.401 9,180 39,794 9,249 29,307 23,220 62,252 2,632 2,560 4,173 6,199 2,729 3,863 2,908 13,473 2,251

32.400

176,241

76,200

129,812

Sept. 1974

Quantity Sold

2,910

2,974 10,035

2,460 1,965 3,701 5,641 2,701 12,900

35,199

30,105 17,015

6,856

152,868

4,161 9,071 26,279 5,875

-30.6

11,805

29.3

233.9 2.3 -25.5

- 9.0 - 1.0

-11.3

-23.2

- 6.5

-43.5

-23.3

-25.9 2.7

284.1

-36.1

-16.3

-49,4

-48.9

- 4.2

-29.5

-14.2

-26.1

-38.7

-45.1

-69.8

X Change

39,165 46,720 130,200 27,814 19,479 4,970 10,598

Oct. 1975

Table iv.7i FOOD RETAIL OUTLETSi MONTHLY OUANTITIES SOLO, BY FOOD CATEGORIES. 1974 AND 1975

32,410

31,980

654

6,413

1,159 4,013

878

35,278 1,651 5,555 2,747 3,430

14,399

1,978 28,707

18,901

4,490

19,346

110,980 5,637 12,793 4,749 12,016 0,787 6,930 10,049

3,002

7,767

3,840

2,043 11,304

3,352 3,380 7,110

5,860

52,302 12,600 40,402

14,141

2,399 34,168 7,663 8,314 20,449 123,422 12,272 81,929

11,036

35,944 68,502 94,960 8,994

Oct. 1975

Sold

BARRIO <»RERO

Quantity Sept. 1974

)59.0

21.1

• 4.3

975.3

132.7

107.3

23.0

-39.7

254.9

-12.5 14.5

82.2

614.9

173.3 331.6

538.0

103.5

20.0

-12,8

104.4

-49.5

-13.7

59.6

10.9 114.2 -14.4

aianoe

4,283 8,115 7,972 11,623 4,373 5,413 8,978 29,344 4,610

123,222

68,399 45,041

14,780

58,775

15,892

34,591 16,074 26,219 62,564

34,857

136,104 429,020 42,144 54,932 10,254

164,318

1974

Quantity

26,183 6,682

6,262 32,335 8,666

14,947

9,182

6,667

97,099 41,120 99,018 8,320

23,935

31,695 162,543 19,757 250,373

15,195

98,849 149,162 270,076 46,445 45,224 11,003 48,509 25,671

1975

Sold

44. 9

497.4 - 3.5 -10.8

43.2

28.6

15.2

94.3 -17.9

-19.7

- 8.7

42.0

61.9

326.0

24.3

20.9 159.8

39.2 -25.8 -10.0

7.3

10.2 -17.7

-35.2

9.6

-39.9

Chanqo

Vegetable Fat

Lbs.

Pints

Juices, Concentrated

Juices, Dehydrated

Other Non-Alcoholic Beverages

Lbs.

pints

3,027

21,177

1,512 40,613 10,000

Pints

••

-1.5

9,430 4,207 2,291 2,649

-96.6

336

153

2,547

444

6,779

100.9

5.6

-23.8

30,960 22,364 6,081 21,020 11,752

449.7

8,312

-15.3

5.9

264.9 79.8

540

6,793 7,215 9,571 4,960 7,194

148

125.9

12,973

18,193 7,770

3,440

Pints

juicee

T.v. Dinners

Soft Drinks Malt

Other Sweets Bread Crackere

Italian Paotao Canned add Proceaoed Italian Paetae.Not Proceosed Spicee, Vinegar, etc. Sugar, Refined

Coffee, Chocolate, Tea , and Other Soupe, All

Oilo

Lard

Lbs.

Pinto

3.4

33,945

Evaporated Milk Other Dairy producte

-11.6

40,932

46,320 32,823

No.

Liters

Milk, F£ooh

Chance

Oct. 1975

Hav 1974

Unit

Sold

HOCA

Quantity

Eggo

FOOD CATEGORIES

Table IV.7: (COTTD.)

11,035

7,979 56,151 3,494 56,474

17,774 1,851 23,129 13,326 13,518 11,216

70,068 43,611 51.0

12,359

139,916

370.4

13,492

4,712 3,636

1,090

1,203

2,801 2,044

35,319

180

23,338

60,776

86.0

-77.4

790

105,021 9,183 53,950 22,745 20,895

39.0 29.5 113.5

1,641 18,872 10,417

1,181 14,569 4,879

- 7.9

51,740

-16.8

-27.5 31,280

2,868 43,152

34.8

8,506 6,374 4,481

6,311

43,376

71.6

14,675 92,220 18,941

42,241 33,945 22,495

18.4 57.9

15,923

2-7,564 3,409

34,264

129.3

163.3

129.2

207,024 119,363

1974

Quantity

18,627

-12.5

-11.2

7.1 43.5

55.6

6,350 1,410 13,454 21,700 10,856

- 1.9

10,387 14,557 3,712

19.6

19.9

108,652 51,350

-22.8 -

90,636 42,929

chanae

% Chaneo

Sold Oct. 1975

BARRIO OBRERO

Quantity .sent. 1974

18,293

3,679

9,002

2,880 24,778 19,123 11,997 9,809

42,651 17,438

54,072 65,870

Oct. 1975

sold

GUAYAHA

Soot. 1974

Quantity

57,835 21,075 42,098 4,335 9,303 4,992

135,746

10,809 40,097 113,980 2,767 146,257 25,681

17,667

47,895 66,360 40,054 22,522

109.2

7,132

35.6

58.6

-81.1

224.4 -18.5

0.1

57.1 18.0

10.4

44.3

26.6

- 1.6

Chaneo

151,165 71,231 39,765

203,656

1975

Sold

ALL AREAS

among the three areas in the movement of the average price

from one year to the other.

Many products which appear to

have risen in price in one municipality, seem to have expe rienced reduced prices in others (see e.g. dry beans,cod

fish). Moreover, the rate of change also varies (see e.g. poultry).

These differences may be partially due to qual

ity differences which are not captured in responses (e.g. codfish comes in two qualities, and the more expensive one

is not frec[uently available); to errors in responses, since information on quantity sold, sales value, and unit value relates to the month prior to the interview and has not been

obtained in most cases from bookeeping records but from the memory of the respondent.

That most stores rely on loose

notes has been brought out in previous paragraphs.

There

is also the problem of the heterogeneity of the product groiip

and the differences in its composition between regions.

This

may explain the variation in the price of food categories such as "other fish".

However, differences in prices are

registered even in items which are more homogeneous, such as onions.

Commodities whose prices are controlled do not show

large variations, and the differences may be due to the proc ess of collecting the data.

1974

1975

.40

.49

-20.4

.43

.54

.44

.13

7.0 -20.0

.46 .08

.10

26.2

.53

20.0

-23.6

6.9

1.24

Sausage

.80 1.24

4.0 -10.0 1.17

1.00 1.30

16.7 40.5

.70 1.17

.60 .84

Other Meat, Processed

Fish and Seafood, Fresh and Frozen

Cod Fis I

1.25

1.17

1.0

1.01 1.04

1.16 1.00

5.8

120.7

1.30

Luncheon .53

1.45

1.31

1.57

.59

.78

1.38

Meat

-37.7 .86 1.38

12.0

1.12

2.00

1.00

Corned Beef

-33.7

.55 1.26

.72

1.90

.49 36.5

Entrails 1.27

Other Meat, Fresh and Frozen _

24.0 1.19

.96

.77

.62

.83

.50

Poultry, Fresh and Frozen

1.09

1.01

1.03

1.40

1.20

1.73

.51

.92

-12.1

26.2

-17.6

-3.4

-8.4

10.2

-13.6

17.9

18.3

42.7 1.47 1.03 32.0 24.2

1.61

1.22

13.4 66.0

1.44

1.27

Porh, Fresh and Frozen

.71

4.4 -8.2

.60

15.4 .60 1.19

.52 1.14

-11.6

.38 1.23

.43

1.34

51.2 13.3

.62

Canned,Frozen,or Dried 1.28

-30.8

2.0

25.0

-8.1

.41

.09

.34

.60

1.13

Lbs.

Fruits,

.37

.50

25.0

-1.8

4.4

-18.4

25.0

16.7

-15.0

16.7

Change

Beef and Veal, Fresh and Frozen

No.

Fruits, Fresh

8.6

.38

.35 .43

15.6

.37

.32 .42 .14

.56 .51

-7.0

.40

.43

.88

Other Vegetables, Fresh Tomato Sauce, Canned _

.40 .32

-5.4

.50

.53

64.1 -40.9

.64 .52

.39

Tomato, Fresh

Other Vegetables, Canned and Frozen

6.1

.35

.33

24.0

.30

.25

Beans, Frozen and Canned

Onions, Fresh

.30

.56

-11.4

.44

.41

.24

.47 .55

.45

-12.0

.45 .39

.50

-5.3 -18.0

.36

.42

.45

21.7

.56

.46

.60

23.8

.26

.21

21.7

.28

.23 .48

.28

.24

14.3

.16

.14

6.7

.16 -6.7

.17

.24 .20

-7.4

.25

.27

42.9

.30

.28

1975

.15

Change

Oct.

BARRIO OBRERO

Sept.

.21

1975

Oct.

% Change

Sept.

.50

Lbs.

1974

Oct.

.38

Other Cereals Beans, Dried Beans, Other

Rice

Potatoes

Starchy Vegetables

FOOD CATEGORIES

May

Table IV.8: FOOD RETAIL OUTLETS; AVERAGE PRICES,BY FOOD CATEGORIES, 1974 and 1975

1.14

.82

1.02

1.26

1.30

1.90

.63

.89

.59

1.11

1.23

.44

.11

.45

.27

.41

.51

.29

.49

.47

.50

.46

.23

.16

.27

1974

1.14

.95

1.06

1.31

1.06

1.43

.52

1.00

.76

1.52

1.21

.54

.09

.53

.39

.37

.58

.33

.50

.42

.43

.49

.27

.16

.27

1975

ALL AREAS

15.9

3.9

4.0

-18.5

-24.7

-17.5

12.4

28.8

36.9

-1.6

22.7

-18.2

17.8

44.4

-9.8

13.7

13.8

2.0

-10.6

-14.0

6.5

17.4

Change

Soups, All

Pints

Lbs.

Pints

Lbs.

.52

.68

.90

-24.5

60.0

183.3

-15.2

50.0

60.0

21.8

13.3

14.6

-48.4

113.8

44.1

.67

.37

.49

.37

.57

.43

1.15

1.10

1.50

.51

.78

.41

.27

.72

.37

.94

7.5

91.8

-27.0

21.1

.45

.54

4.7

2.6

-29.1

8.0

64.7

37.2

19.5

50.0

44.3

.55

.86

.37

.84

.38

.47

0.84

.41

1.05

.30

.41

.62

.59

.47

1.16

.95 .40

.88

.65

.92

.44

1.17

.38

.49

.07

1.62

1975

.67

.66

.42

.06

2.40

1974

Change

Oct.

-2.3

10.8

25.0

-21.1

-12.8

17.5

22.1

-4.4

25.0

-3.0

75.8

16.7

-32.5

.76

.35

.36

.51

.40

1.04

.93

.48

.60

.73

.40

.06

.93

.76

.38

.97

.28

.42

.62

.55

.46

1.18

8.6

177.1

-17.6 22.2

15.0

13.5

-12.9

12.5

20.0 .81

.54

56.2 .72

22.5

16.7

55.9

1.14

.41

.49

.07

1.45

Change 1975

Change

1974

ALL AREAS

BARRIO OBRERO

Sept.

.62

.45

1.18

.78

.54

.84

1.07

.41

.49

.09

1.27

1975

Oct.

the sales of 1974 were used as weights. The prices of those categories not recorded in 1974 were omitted.

In the construction of the price index based on average values contained in this table, the shares of each product category in

=107.8

.40

.25

Overall price index for all areas (1974 = 100)

Crackers

Bread

.28 .68

.33

Sugar, Refined Other Sweets .24

.36

.63

.24

.48

.68

.60

.30

.55

.48

1.23

.63

.58 1.22

1.01

1.24

.40

Spices, Vinegar,and Other

Italian Pasta,Not Processed

Processed

Italian Pasta, Canned and

.49

.34

Liter

.06

.88

.06 -

227.9

1.44

.06

.43

Lbs.

1975

Change

1975

1974

UNIT

Sept.

Oct.

MOCA

May

Other

Coffee, Chocolate, Tea,and

Oils

Lard

Evaporated Milk Other Dairy Products Vegetable Fat

Other Fish and Seafood, Processed Eggs Milh, Fresh

FOOD CATEGORIES

Table IV.8; (CONT'Dj

Table IV.9 compares the changes in the unit values ac

cording to the surveys with changes in the

consumer price

index for seemingly comparable items as compiled by the Puerto Rico Department of Labor for wage earner families. Except for rice, beans, onions, tomato sauce, milk,and

sugar, there appears to be a greater correspondence between the two series in the unit values of Barrio Obrero than in

the other areas.

However, the comparison is subject to

severe limitations, in that

(a) the list of items in the

price index of the Department of Labor is incomplete;"^ (b) the categories do not coincide fully with those of the

surveys; (c) the survey results are not 100 percent correct.

The changes in the prices of some items are exogenous to Puerto Rico; e.g. rice and sugar.

The increases in the

prices of pork and poultry are attributable to developments

in local as well as import prices.

The curious development

in the case of the latter item is that poultry prices have increased over a period when sales have declined (at least

in the three municipalities in question) and when local pro-

For example, beef does not appear among imported food items; the only imported pork meat seems to be pork chops; the only imported poultry meat is chicken parts.

3.4

Crackers

7.1 25.9

20.7

4.1

6.4

8.3

^ Plantain, tanier, and green biuiana, only. ^ Pork chops, only, c/ Chicken parts, only.

N.C. No chance

6.6

- 20.7

0.8

6.7

26.2

2.2

0.1

0-1 8.3

3.2

-30.4

10.0 17.4

18.9

- 7.7

3.1 -- 18.9

17.8

-8.6 - 43.4^ 12.3 - 37.SS/

Sugar, Refined

Ta-J

Eggs Milk, Fresh

Cod Fish

Fish, Fresh

Other Meat Processed

corned Beef

Pork

Beef

Tomato Sauce

Tomatoes, Fresh

B--'

Potatoes

Starchy Vegetables

14.1

16.7

- 37.9 15.7

23.4 32.5 8.7 - 37.0

19.2

.17.9

6.7c/

34.7l2/

16 1

"2^;

21.6

-28.6

Oct. 75/ May 74 Oct. 75/Sept.74 Oct. 75/ May 74

32.2

12.1 22.4 - 28.5

1.1

N-C -

.17.0

13.4=/

27.2^

8.1

21.6

19.0

IMPORTED FOOD —

1314

-24.5

7,5

8.0 -29.1 2I 1 27 O

19.5

44.1

14.6 13.3 50,0 _15 2

50.0

4.0

-10.0

-37.7 1 0 -.*«

N.C

18.7

32;o 24 2

- n ?

8.6

lai

- 6541

-20.4

14.3

- 7.4

40.5

12.0 120.7 it n

66.0

13 3

^ 15.6

6411

24 0

'i'c "-C

6.7

42.9

MOCA ^

Table IV.9: PRICE COMPARISONSi SURVEY RESULTS VS. PR. DEPARTMENT OF LABOR'S CONSUMER PRICE INDEX FOR WAGE EARNERS

7 ■lo.'*

26.2

- w'b 2)3

16.7

10.7

25.0 - 4.4 -1? a 71 1

16.7

-12.1

- 176 8 4 -

18.3

1^3

>, >. 4^7

20.0 25.0

-la 4

-15 n

duction as well as imports have expanded (as evidenced by

the statistics of the Puerto Rico Department of Agriculture)-^ The findings, however, attest to an increase in food

prices in general.

The price index for the three areas

y (1974=100) is estimated to be 107.8.

It is interesting

to note that the overall food price index compiled by the Puerto Rico Department of Labor stood at 110.7 in October

1975 with respect to May 1974 and at 107.8 with respect to

September 1974.

The latter is identical to the survey re

sult, which is not surprising, since Guayama and Barrio Obrero, where survey information refers to September 1974 and October 1975, account for 81 percent of the total sales

of the three areas.

It is also interesting to note that the

U.S. food price index in the fourth quarter of 1975 was 107.5 with respect to the

_1/

3/ second quarter of 1974. Again,

Several issues of Boletin Mensual de Departamento de Aqricultura indicate that there is no decline in either

imports or local production of poultry since June 1974.

In the construction of the price index based on unit values of the survey results, the shares of each prod

uct category in the sales of 1974 were used as weights. The prices of those categories not recorded in 1974 were omitted.

Based on estimates made by the United States Department of Agriculture in February 1976.

the closeness of the two indices is indicated in Figures TV.l and IV.2 which plot the price indices of imported and

locally produced food in Puerto Rico, and the consumer price in Puerto Rico and United States# respectively. The sharp increase in the prices of locally produced food be tween October and December 1974, and its impact on consumer

prices,is due to Hurricane Eloise which damaged a substantisl portion of local crops.

This leads us to conclude that

the Food Stamp Program as specifically applied in Puerto

Rico does not have on overall impact on food prices separate and in addition to those price changes that may arise from the implementation of the Program in mainland

United States.

This does not preclude that prices of individual items which

are mainly produced locally

will not rise; it does imply,

however, that such price changes will not be of substance

in determining the change in the overall price index. It can be inferred that the Program, in contrast, does

have an impact on real demand for food.

For, deflated by

the price index of 107.8, the 1975 food sales (excluding those items not recorded in 1974) represent an increase of 20.4 percent over the combined sales in 1974.

This rate of

increase is only 1.3 percentage points higher than the rate

Sowrce;

1973

°^ ^

1-974 ^ Commonwealth Department of Labor, Bureau of Labor Statxstics.

Local

Import

FIGURE IV.I FOOD PRICE INDICES, PUERTO RICO,1967 = 100

A ^ i j j .i A o j j ^ j j ;i j a >1 ° ^

120-

I40_

160-

I80_

200_

INDEX

■'

1975

Source; Commonwealth Department of Labor, Bureau of Labor Statistics

JaSONO j FMAMi jikoND^

1974

United States

Puerto Rico

FIGURE IV.2 CONSUMER PRICE INDICES, PUERTO RICO AND U.S.A., 1967 = 100.

AMj j ASONdJ

I20_

130.

I40_

I50_

160^

I70_

INDEX

originally estimated in the previous study

This study

had also forecast a 16 percent decline in real personal dis

posable income in 1975. Accordingly, a 4.7 percent decline was forecast in the demand for food which would turn into an

11.5 percent increase because of the Food Stamp Program; i.e., the study had estimated the impact of the Program as a 16.2 2/

percent increase in the real demand for food.â&#x20AC;&#x201D;

In reality

disposable personal income (excluding bonus food stamps)de3/ dined by 10.8 percent in real terms in fiscal year 1975, and the 20.4 percent real increase in food sales, as

vealed by the surveys, has been 4.2 percentage points higher than predicted previously.

Under the circumstances it does

not seem unrealistic to surmise that the growth in food sales has primarily been due to the Program. B.

Wholesale Outlets

Nine food wholesalers were scanned in the three areas;

eight responded to the questions in 1974 and were revisited in 1975.

It was possible to interview the same wholesalers

Choudhury, et al., op. cit., Table VI.9, P. 128.

;rbid.. Table IV.11, p. 130. Calculated from information in Puerto Rico Planning Board, Economic Report to the Governor, 1975.

in Moca and Barrio Obrero. One of the five wholesalers in in Guayama could not be interviewed, and therefore was re

placed by another who also operates as a retailer. In this sense the results of the surveys of wholesalers are not

strictly comparable. One wholesaler in Barrio Obrero is an old-age pensioner who is not commercially motivated, but uses his business to remain active until a prospective buyer

appears on the scene. Lack of commercial motivation finds its forms in not taking initiatives to expand and modernize

facilities, which stem from the statutory restrictions in

the social Security legislation on incomes earned in addi tion to the pension already received; his preference is to

go along with this restriction. Already in 1974 he had expressed the desire of closing down; yet he has been par ticipating in the Food Stamp Program ever since it was ex tended to his area.

All the wholesalers participate in the Food Stamp Pro

gram. Seven out of eight were in the general line of gro ceries in 1974, with only one specializing in frozen foods. This one outlet has extended its storage facilities in the meantime and is now engaged in the general line of groceries

Five of them had monthly food sales over $50,000 in 1974; 73

three had lower monthly sales. There appears to be a pro portionate relationship between sales per establishment and

physical size: average store space has increased at approx imately the same rate as average sales. Consequently, there

has been no perceptible change in sales per square foot as the economic size of the establishment grew. But there is a market variation among the regions: Guayama has the lar

gest sales per square foot and per establishment. Moreover, larger space has been provided for frozen food as sales increased.

The fact that average store space has increased pro portionately to food sales implies probably that full ad

vantage has not been taken of available space, for there is

a generally accepted rule that inventories normally rise at the rate of the square root of the expansion in sales, if

so, larger sales should ideally be handled with a propor

tionately smaller increase in physical size. This may ex plain the assertion made by half of the food wholesalers

that they could accomodate a sales expansion of up to 50 or

60 percent, which implies the availability of excess capac ity. in other words, existing facilities were not being used to the full extent that normal operating conditions 74

would allow.

That greater sales could be handled with a proportion

ately smaller increase in physical size was attested by the fact that only two wholesalers reported expansion of the size of their establishments. This has meant additional

sales per added square foot of $65.50, which are consider

ably larger than the sales per square foot of $13.00 and $19.00, respectively, that they reported in 1974. Three wholesalers also considered that their sales have increased, but they saw no need to expand their establishments. This is consistent with the responses to the previous surveys

that sales could be increased by 50 to 60 percent without an expansion in physical capacity. The factor that was

brought out as the major obstacle to sales expansion in the face of increased demand was the lack of operating capital rather than the lack of space. The remaining wholesalers

do not think that the Food Stamp Program has had any impact on their sales.

in much the same way as food retailers, those food wholesalers who expected and realized expanded sales have not

found it necessary to purchase new equipment. Although a

year earlier all the establishments indicated need of edu75

cational assistance on Program benefits and the processing and handling of coupons, as well as financial assistance, such requests were not made with the exception of one whole

saler

who reported that his petition for financial assist

ance was turned down.

In 1974, employment in the eight outlets had totaled 43

persons, only five of whom were non-salaried, in 1975, 41 persons are employed, of whom six are non-salaried.

expected, salaried employment is concentrated in the larger stores.

In 1974 the average monthly salary ranged from

$350 in Moca to $358 in Guayama and $613 in Barrio Obrero;

in 1975 the averages have changed to $450, $317, respectively.

and $434,

in fact, there appears to be a slight decline

in average monthly salary.

Only two wholesalers consider that the Food Stamp Pro gram has

caused operational expenses to increase.

Again,

electricity rates were singled out as the most crucial fac tor.

But, as mentioned previously, the increase in such

costs is due, not to the Program, but to the increase in

tariff rates, which have more than doubled over the years. The Food Stamp Program has not had much impact on the accounting systems used by the respondents, since all es-

tablishments were keeping accounting books in addition to relying on loose notes.

All had declared in 1974 that

they utilized the accounting system required by tax and insurance laws.

In 1975 the use of accounting

books ap

pears to be more relied on.

Table IV.10 reveals the increases in monthly food sales at the wholesale level that the areas have experienced sinoe the initiation of the Food Stamp Program.

The rates of

increase are lower than those registered in retail sales

(see Table IV.4).

Table IV.10 :

Monthly Food Sales by Wholesalers

May/September, 1974-October 1975. (dollars) Barrio

Moca

Guayama

Obrero

Total

In current prices 1974

67,117

269,249

60,712

397,078

1975

91,100

282,781

72,201

446,082

35.7

5.0

18.9

81,998

258,974

66,239

Percent increase

12.3

In constant prices 1975

Percent increase

22.2

-3.8

407,212

9.0

2.6

Deflated by the food component of the consumer price index of the Puerto Rico Department of Labor. sale price index is available in Puerto Rico.

No whole

The impact of the economic recession is more clearly visible in Guayama, with a 3.8 percent decline in food sales

at the wholesale level in October 1975 as compared with

September 1974.

The total increase in constant prices is

2.6 percent as compared to the 30.6 percent increase re vealed by the responses at the retail level.

growth

The slow

is in accordance with the majority of the responses

of the wholesalers in Food Stamp Program has

that they do not consider that the had much impact on their sales.

added point to consider is that the principal wholesalers are concentrated in the San Juan Area and there is no close

link between the wholesalers and retailers in the same area.

As a consequence the expanded sales of the retailers spill

over to wholesalers who were not canvassed in the surveys, and are not reflected in the sales of those who were.

Tables IV.11 to IV.13 contain comparative information

on monthly food sales at the wholesale level by product cat egories in 1974 and 1975.

Table IV.11 compares the relative

importance of individual food categories in total sales; Table IV.12 indicates the changes in quantities sold; and Table IV.13 compares average prices.

Great care should be exercised in interpreting the re

sults since the data are based mostly on the memory and ex perience of the respondent, rather than actual calculations 78

Fresh

Tomato*

Fresh

May 1974

500

Cod Fish

Fish and Seafood,Fresh and Frozen

Other meat* Processed

Luncheon Moat

Sausage

3*000

2*408

170

1*200

400

4.5

3.6

1.8

Corned Beef

Other meat. Fresh and Frozen

2.7

Poultry* Fresh and Frozen

400

1,800

193

1.1

753

200

9.5

1.9

2.4

38.4

1.246 6*300

1*612

25*800

salonrs) %Diat.

Entrails

Pork* Fresh and Frozen

Beef and veal* Fresh and Frozen

Fruits* Canned* Frozen or Dried

Fruits*

Other Vegetables* canned and Frozen

Other Vegetaleo* Fresh Tomato Sauce* Canned

Presh

Onions*

Beans* Other Beans* FrozorÂ» and Canned

Beans* Dried

Other Cereals

Rico

Potatoes

Starchy Vegetabloo

FOOD CATEGORIES

Sept. 1974

1.0 3.1

8*420

2.5

4*000

2*641

189

1*200

1,000

1*100 8*400 2*520 8*820

700

1*238

4.4

2.9

1.3

1.1

9,7

2.8

9.2

1.2

1.4

187 360

800

ISO

1*114 5*496 8,700 11,950

4.785

5*140

804

595

1*284 1*575 2*200 5*500

6,155 1*430

4.4

3.2

2.6

1.8

1.9

19.9

8.3

6.2

2,3

.3 1.4

890

3*640 1*250

10.1

2,115 27*127 2*700

,4 1.2

8.1

340

Sales(S) %Dint.

7,350 1*118 2*265

Sales(S) %Diot.

Oct. 1975

18*321 1*393 5*300

2*153

3,278 5*943

150

62*227 2*349

23*809

2*112 25*688

2*261

7*454

424

4*474

5*191 2*148

1,692 31*663

1.9

6.5

2.1

1.2

22.0

8.4

9.1

2.6

1.6

1.8

11.2

Oct. 1975 Sales(S) %Diat. Oct. 1975

3*300

2*400

400

1*645 1*550

4*500 8*000

8*800

163

166

578

113

127

480

850

3*290

425 172

599

361

1,170

320

720

506

277

3,191

5.4

3.9

2.6

2.7

482

2*118 1*152

209

614

815

320

615

7*960 3,965 13.2 11,232 7.4

14.5

1.0

1.4

5.4

4*152 56*217 4*796

1*996

8*533

150

1*643 3*967 1*556

1.6

2.9

1.1

7*185 7,535 1,684 7,904 11,100 18*250

804

595

1,947 11.0 25*375 5.5 26*700 15.6 61*500 .8

1.6

1.0 .4

4.7

2.8

2.0

1.9

1.6

15.5

.5 6.4 6.7

2.1 .5

1.0

3.9

1.0 14.2 1.2

1974 Sales

,7 15*280

4.4

SalesrS) %Diot. Sales(t) U>iBt

Sept. 1974

Table TV.lli FOOD WHOLBSALB OUTLETSI PBRCEHTASB DISTRIBUTIOH OF HOima.y FOOD SAIBS,BY FOOD CATEGORIES,1974 AND 197S

5,093 7,757 2,551 23,080 2,545 9,782

470

3.811 42,048 30,294 82,279 2.964

9,862 3,322

5.381 1,104

880

2,204 42.203 6,585 4,918

6.8

9.4

2.2

1.2

1.1

1.5

9.5

2.2

5.2

1.7 .6

1.1

18.5

1975 Sales fS)

n.a.

Total

Other non-Alcoholic Beverages

Juices, Dehydrated

Juices Concentrated

Juices

T.V. Dinners

Halt

Soft Drinks

Crackers

Broad

Other Sweets

Sugar, Refined

1,200

3,200

475

n.a.

Spices, Vinegar* etc

n.o.

1,600

Italian Pasta, Not Proccoood

1,620

Coffee, Chocnlate, Tea, and Otho»

Soupo, All

Italian pasta. Canned and Processed

1-. 300 2,000

9,46r

Oct. 1975

1.9

n.a.

100.0282,779 100.0

4.1 1.8 4.7

8,115 3.6

11,552 14,360

n.a. n.a.

n.a. n.a. n.a. n.a. n.a.

1.2 .9 .4

638

100.0

72,201

n.a.

60,712

280 -

n.a.

100.0

n.a. n.a.

n.a.

1.4 874

397,078

1.3 -

5,987

1.5

1.0

6,664 1,254

2.9

12,941 4,550

100.0 446,082

n.a.

1,020

n.a.

4.5

3,255

n.a.

2.0

9,075

.1 -

1.9

275 .1 160

250

7,464 ,7 487

.4 .8

2.4 7.6

3,665 10,570 1.7

6,525 .6 8.4

30,250

1.8

1.4 55

1,915 n.a. n.a.

757

6,272

3.7 n.a.

1.1

n.a.

2.6

10,310

14,883

3.0 2.0

21,033 7,938

1,426

2.9

2,186

393

1.7

2.8

9.2 4.3

6,658 3,110

6.8

4.4

12,339 19,655 1,032 18,126 65 0

n.a.

27,110

1.7

6,084

.4 .8 -

8.1

1,925 3,570

5,864

9.5

n.a.

.9 .1

3,450 315

1,515

1*251

n.a.

1.1

2,495 -

3,212

n.a.

356

n.o.

n.a.

260

n.a.

1,690

n.a.

.6 -

n.a.

2.2 2.0

1.4

n.a.

6,208 5,686 2,135

1,032

4,100

269,249

n.a.

5,232 n

160

5,755

n.a.

1.5

1,395

145

.1 .1

250 •

1.3

3,779

7.9

1.0

2,747

2.2

6,050 21,295

n.a. n.o.

n.a.

1.9

1,260

n.a.

3.5

2.9

1.9

2,047

4.1

2.5

3.0

5,207 5,252

7.3

n.a.

4.9

n.a.

4,460

6.9

3.3

1.1

2.7

2.4

_ «

845 220

.1 2.5

1,500

1975 Sales (S) %Dist.

ALL AREAS

1974 sales (SI *Dlot.

1.2

Oct. 1975 Sales(S)

1.2

1,032 9,454 3,090

6,825 7,679

1,080 3,350

sent. 1974

Sales(S) %Di8t.

3,000

4.4

Oct. 1975

4,185 1,760 2,143

2.7

4,000

2,380

130

707

100.0 81,099

4.0

263 600 525

4.9

n.a.

13,190

n.a.

315

.5 .7

1.425 1,950

1.3

2.1 18.4

2.2

n.a. n.a. .7

Sept. 1974 Sales(S) XDist. Sales($) ^ist.

7,252 8,175 6,730 11,140

6.7

2,016

6,112

3.0 1,915 2.7 16,800 2.4 1,225

1.9

U.l

n.a. 4,263

»Diot. Sales($) XDist.

f4ay 1974

SalopfS)

Lard Oilo

Vogetablo Pat

Other Dairy Products

Evaporated Milk

Milk, P'*AOh

Eggo

Othor Pish and Seafood, proceasod

FOOD CATEGORIES

Toblo IV.11: (CONTD.)

from invoices or accounting entries.

Moreover, the 1975

classification is not strictly comparable

with that of

1974, not only because the former includes soft drinks and

beverages which in 1975 account for 7 percent of the

sales,

but because of the heterogeneity and changing composition of the food categories among the areas and from one year to another.

The most widely sold food products are beef, pork,and

chicken meat; rice; dairy porducts; coffee; and sugar,which represented 61.8 percent and 65.4 percent of total sales

(excluding soft drinks, etc.) in 1974 and 1975, respectively.

The individual importance of each category differs from 1974 to 1975 and among areas.

Overall, the relative importance

of rice, beans, dairy products, and sugar appears to have

declined, while that of beef, veal, poultry, and pork appears to have increased.

The pattern is verified by the figures

in Table IV.12 which indicate substantial declines in quan

tities sold of rice, beans, codfish, and sugar. to the findings of the food

Contrary

retailers' surveys, there have

been an increase in the sales of poultry at the wholesale level.

No great degree of divergence in the sales pattern

among the three areas was evident in 1974. 81

A divergence,

Starchy vegetables

Mo.

169

Evaporated Milk

14,400

Pints

Liter

Milk,

Fresh

Doz.

Eggs

2,400

'■

Other Fish and Seafood, Processed

66.7

2.8

4,420 4,000

6.5

IBO

N.C.

1,500

Cod Fish

4,300

233.3

900

10,000 2,100 14,000

212.5

SOLD

-5.4

242.3

-66.7

2,054 600

1,800 2,880 4,065 1,170 7,000 4,300 9,500

1,500

3,408

785

-20.0

19,600

181.7 -53.0

2,020

19,200

5,000

46.7

6,000 -36.8 13,825 1 ,661.1

30.8

75.3

2,970 7,125 1,530 19,720

3.1

76.9

23,000 92,180

84.4

130.3

21.7

-61.5

104.2

-90.5

-61.8

251.4

-5.4

10.1

Change

600

7,290

26,526 4,688

1,500

13,080

200

20,227 6,500

129,000

12,000

Oct.1975

3,953 13,000 24,500 97,400

2,036

3,000

64.7

2,100

21,800

320

2,100 6,405 3,900

136,300 5,756 17,000

10,900

-18.7

QUANTITY

Sept. 1974

3,900

1,500

270

960

4,800 1,275

210.1

58.7

600

2,000

370

645

- 7.0

2,000

Fish and Seafood, Fresh and Frozen

Other Meat, Processed

Luncheon Meat

'•

Sausage

Entrails

Corned Beef

Other Meat, Fresh and Frozen

Beef and Veal, Fresh and Frozen

Poultry, Fresh and Frozen

Pork, Fresh and Frozen

Lbs.

Fruits, Fresh Fruits, Canned, Frozen,or Dried

Other vegetables. Canned and Frozen

Tomato Sauce, Canned

Other vegetables. Fresh

Tomato, Fresh

Onions, Fresh

Beans, Frozen and Canned

Beans, Other

-58.3

-47.0

-81.4 -61.2

5,000

5,680

2,000 30,000 3,118

Change

12,000 2,150

Beani^ Dried

77,400

10,750

Oct. 1975

May 1974

Rice Other Cereals

Potatoes

Lbs.

SOLD

QUANTITY

Table IV.12: FOOD WHOLESALE OUTLETS: MONTHLY QUANTITIES SOLD, BY FOOD CATEGORIES, 1974 AND 1975

SOLD

-45.8

-2.5

3,684

20.0

537.8

810

3,600

127

3,000 -

-80.0

-60.0

-46.7

-65.4

-31.2

600

1,600

192 3,151

623

805

1,020

820

0.5

15,600

61.5

123.0

81.5

33 3

612 5

44.0

-75.5

-4.6

-75.0

1,260 8,040 3,250

937

3,540

2,088 2,000

1,440

683

12,600

1,250

1,500

14,900 912 6,408

1,699 11,300 8,300

4,320 7,365

1,800

600

113,400

5,693 21,000 30,500

3,731

28,550

320

6,045

7,076

4,250

30,000

226,900 14,126

26,650

1974

QUANTITY

Changa

3,000

4,000

360

1,800

1,170

6,000 16,000

780 8,000

420

1,950

293 1,500

1,000

5,000 13,200 2,490

Sept. 1974 Oct. 1975

QUANTITY

BARRIO OBRERO

-28.9

-56.4

141.5

11.9

25.6

8.2

-rlO.O

379.0

102.9 95.4 -18.2 7.4

107.0

19.0

172.8 -9.0

-48.2

-56.9

70.1

-24.4

37,284

8,600

34.2

14,635 1 504.7

3,620 10,600

27,291

1,902

9,248

4,675

1,620

121,780 2,874

24,950

41,040

11,550

7,725

33,966

5,500

15,768

2,200

24,028 12,940

171,600

-42.8

Change

15,250

19^5

SOIJ)..

Pints Lbs.

Juices, Concentrated

Other Non-Alcoholic Beverages

Pints

Juices

Juices, Dehydrated

Pints Lbs.

Soft Drinks Malt T.V. Dinners

Crackers

Bread

Other Sweets

Sugar Refined

Spices, Vinegar, etc.

Italian Pasta, Not Processed

Pints

Lbs.

Italian Pasta, Canned and Processed

Pints

Coffee, Chocolate, Tea, and Other Soups, All

Lbs.

UNIT

Oils

Lard

Other Dairy Products Vegetable Pat

Table IV.12 : (CONTD.)

N.A.

1,440

9,100

1,100

6,600

2,000

4,320

2,700

21,900

May 1974

QUANTITY

2,025

300

3,450

3,600 14,400 4,593

1,100 3,000

2,000

394

1,950 11,600 3,525

3,600

4,898

Oct. 1975

SOLD

N.A.

150.0

-67.0

N.C.

480.0 -46.6

-54.9

33.3

-77.6

Change

* %

-84.8

N.A.

8,952

400

360

9,825 56,400

28,954

10,600 1,790

2,820

180

13,530

8,400 22,650 7,068

100

160

12,796 9,240 2,085 11,577 14,100

N.A.

N.A. N.A. N.A.

N.A.

1,980

14,400

192

6,784

1,600

13,500

6,000

11,040

Sept./74

270

990

2,740

11,160 3,421

739

25,800

1,440

100

1,989

2,190 3,126

5,064

13,650

5,167

Oct./75

SOLD

BARRIO OBRERO

QUANTITY

N.A.

- 6.2

-75.0

-55.6

-75.0

17.8

-55.8

-83.1

-46.8

-31.7

1340.0

1,440

19,240 5,485

6,120

14,606 10,309

100

Oct. 1975 Change

SOLD

40,200

Sept. 1974

QUANTITY *

N.A.

-62.7

79.2

650.0

-53.9

36.9

-62.5

127.5

-53.2

Change

N.A.

12,372

400

360

79,900

11,117

42,338

28,129 14,200

23,306

100

73,140

1974

QUANTITY

5,115

1,470

19,720

N.A.

15,082

48,210

12,739

100

42,900 250

14,117

4,185

11,623

15,580 19,447

36,490 12,499

1,440

16,185

1975

SOLD

N.A.

3.0

-75.0

-30.5

26.9 -46.3

-54.1

9.7

-55.6

-77.9 1340.0 56.6

Change

however, appears in 1975, especially if the differential change in quantities

sold is considered.

For example,

there has been a moderate increase in sales of potatoes

(10.1 percent) in Guayama, while sales have been reduced drastically in Moca and Barrio Obrero.

In Moca, sales of

beef, veal, pork, and poultry are reported in 1975, while no such sales were recorded in 1974.

Although, measured in

pounds, sales of pork have declined, because of the higher

price their value has increased.

An examination of Tables

IV.12 and IV.13 will yield further cases of differential sales behavior among the three areas.

On the whole, of the

aforementioned items, six seem to have been sold in substan

tially lower quantities,

in contrast, commodities,especially

meat products, which did not appear in the sales records of Moca in 1974, are now being traded at the wholesale level. There does not seem to exist a great deal of correspond ence among the three study areas in the movement of average prices from one year to the other.

Similar to the case of

retailers, many products which appear to have increased in

price in one area decreased in price in others (see Table

IV.13). Moreover, the rate of change also varies. The findings, however, attest to an increase in whole-

.53 .30

Cod Fish

Other Meat, Processed

Fish and Seafood,Fresh and Frozen

Luncheon Meat

Sausage

Corned Beef

Entrails

Other Meat, Fresh and Frozen

Poultry, Fresh and Frozen

Pork, Fresh and Frozen

Lbs. .84

.63

.80

.60 -

1.25 1.00

.56

1.01 1.05

.89

1.48 1.11

1.20

.37

.33

.32

.45

.36

.52

.31

Fruits, Canned,Frozen,or Dried Beef and Veal, Fresh and Frozen

Fruits, Fresh

.38

Other Vegetables, Canned and Frozen

Tomato Sauce, Canned

Other Vegetables, Fresh

No.

-40.0

.18

.35

Beans, Other Beans, Frozen and Canned Onions, Fresh -

.31

.53

Beans, Dried

Tomato, Fresh

-41.5

.40

.21

-20.0

7.1

4.0

25.0 10.1

28.9

6.5

-15.8

14.3

-15.1

71.4

-27.3

Other Cereals

.24

.33

13.3

% Change

Rice

.17

Oct.

1975

May 1974

.15

Lbs.

Unit

Potatoes

Starchy Vegetables

FOOD CATEGORIES

1.26

2.02

.79

.95

1.18

1.44

.45

.99

.55

.91

1.28

.32

.70

.28

.47

.32

.57

.42

.50

.47

.20

.19

1974

Change

25.0

N.C

.68

15.2

17.7

47.4

.88 -30.2

.69 -65.8

.93

1.40

.83 -29.7

1.10 -23.6

.25 -44.4

1.14

23.6

33.0

1.10

.60

1.11

.87

1.32

.50

.75

1.10

1.21

1.12 -12.5

.40

.21

.30

.08

.43

.48

.34

.25

.08

20.6

N.C

75.0

Change

44.0

62.7

13.8 -

20.0 .80 -27.3

.72

.67

1.09 - 1.8

.99

1.01 -23.5

.31

.75

.72

1.22

.99 -10.0

.47 123.8

10.0 .39 - 2.5 .33

.16 100.0

.34 -20.9

.35 -27.1

.41

.25

.14

1975

Sept. Oct. 1974

.29 - 9.4

.48 -31.4

.28

.28 -12.5

.34 -40.4

.40 - 4.8

.33 -34.0

.26 -44.7

.25

1.41 642.1

1975

Sept. Oct.

Table IV.13: FOOD WHOLESALE OUTLETS: AVERAGE PRICES, BY FOOD CATEGORIES, 1974 AND 1975

1.22

1.34

.70

.99

1.02

1.66

.45

.99

.54

.87

1.21

.34

.53

.30

.47

.26

.56

.39

.51

.34

.25

.15

1974

.92

.70

.85

1.34

.84

1.09

.29

1.03

.68

1.21

1.02

.33

.43

.29

.20

.34

.40

.38

.27

.25

.14

1975

-24.6

-47.8

21.4

-17.7 35.4

-34.3

-35.6

4.0

25.9

39.1

-15.7

:-2.9

-18.9

- 3.3

-23.1

-39.3

2.6

-25.5

-20.6

N.C

-6.7

Change

Crackers

Bread

Other Sweets

Sugar, Refined

Coffee, Chocolate, Tea,and Other Soups, All Italian Pasta, Canned and Processed Italian Pasta, Not processed Spices, Vinegar,etc.

Oils

Lard

Pints

Evaporated Milk Other Dairy Products Vegetable Fat

Lbs.

Pints

Lbs.

Liter

Doz.

Lbs.

Unit

Milk, Fresh

Other Fish and Seafood, Processed Eggs

FOOD CATEGORIES

Table IV.13; (CONTD.)

190.8

n.a.

-n.a.

.98 .24 -31.4

n.a.

.35

-20.5

n.a.

.30

n.a.

1.44

n.a.

.67

n.a.

45.8

.35

.24

.48 .56 16.7 .46 .98 113.0 .91 1.45 59.3

Oct.

MOCA

May

GUAYAMA

n.a.

281.8

.36

.33 1.26

.58

.40

.74

.43

27.6

7.5

.24 31.9

.52

.66

.40 -29.0

.27 .91

.38 ..69

.28 .15 61.3

.24

.62

26.9

-40.0

86.7

n.a.

.55 n.a.

n.a.

.60

n.a. ,

n.a.

.38 n.a.

n.a.

.57

43.8

- 9.1

96.8

- 2.0

182.5

n.a.

.46

n.a. ,

1.00

46.5 73.8

.32

7.9

.41

1.10

81.0

.63 1.14 .38

.61

.31

-29.1

.56

.49

.79

.50

10.8 - 2.0

.72 .49

1.13

.34

.65

.40

n.a.

.50

n.a.

.21 -

.73

17.5

.67 -

1.04

.71 .42

-96.5

.08

.57

Oct.

BARRIO OBRERO

Sept.

1.82

Sept. Oct.

.68

,40

.69

.38

.59

.a.

.35

.73

.21

.54

1.66

1974

.71

.43

1.10

.25

.46 .26

.54

.41

1.35

.65

.50

.72

1.25

.33

.67

.13

1975

AT.T. AREAS

4.4

7.5

59.4

-34.2

-55.9

n.a.

17.1

84.9

27.5

N.C.

10.8

237.8

n.a.

-24.1

-92.2

Change

sale food prices in general of the order of 8.5 percent, which is one percentage point higher than the retail food

price index calculated previously.-^ The conclusion reached with respect to retail food prices stands;

the Food Stamp

Program does not have an added impact on food prices in

Puerto Rico, but does have an impact on the real demand for food.

\/ Again, in the construction of the index the share of each product category in the 1974 sales has been used as weights of unit values; the prices of commodities not recorded in 1974 were omitted.

THE ANALYSES AND RESULTS:

HOUSEHOLDS

This section analyzes the income and expenditures of

the households surveyed, as well as their socio-demographic profiles.

To bring out the importance of the Food Stamp

Program in Puerto Rico, however, the relative importance of

Program participants within the total population is analyzed first. A.

The survey results are discussed subsequently. Participation in the Food Stamp Program in Puerto Rico

Figure V.I depicts the relative importance of

Program

participants within the total population by income level.

The thick line refers to the percentage distribution of the total population by income level, according to the 1970 Cen

sus.

The thin line depicts the percentage distribution of

Program participants in 1975.

Since the Food Stamp Program

did not enter into effect until 1974 and since in Puerto

Rico the Census data are not updated annually to provide

summary estimates of changes in population by level of in come, the following operations were carried out to arrive at some comparable base: 88

{%)

Persons

Figure

Income ($000's)

1970 Census of Population

Department of Social Services, November 1975

- Participant personsÂ» Food Stamp Program,

V.l ; PERCENIAGE DISTRIBUTION OF PERSONS BY INCOME LEVEL

1. The income levels of Food Stamp Program participants as of November 1975, as provided

by the Puerto Rico Department of Social Services, were deflated by the consumer price index to ar

rive at income groupings comparable to those of the Census.

A new size distribution of participant

families was thus obtained with income groups expressed in 1969 dollars and with numbers of

participant persons corresponding to these in come groups.

The percentage distribution of participants

by income group with respect to the 1975 popula tion by income group was then determined to

indicate the relative importance of Program participants within the total population of the same year.

The thin line therefore indicates the relative impor tance of Program participants within the total population

by income level expressed in 1969 dollars. Given the pau city of data, this was the best approximation that could be achieved.

I^ie comparison between the distribution of the popula

tion by income level and the distribution of Food Stamp Pro

gram participants by income level is understandably based on percentages, since the absolute number of households and

persons in a given income class change over the years, but the percentage distribution is relatively insensitive, es

pecially over a period of five years. Both Figure V.I and Table V.I show that participants tend to be the poorest of

the poor. Actually, the highest rate of participation of

94.6 percent is found in the income group (expressed in 1969 dollars) of $550 to $1,000 (not shown in the table). The

participation rate drops to approximately 6 percent at the income level $6,000 to $8,000 (expressed in 1969 dollars). The overall participation rate is revealed to be about 46 percent.

Several reservations should be noted. First of all, as

explained above, adjustments in income levels were made according to the changes in overall purchasing power of the dollar between 1969 and 1975, when such changes may have been at different rates for different levels of income ac

cording to differences in spending patterns. Secondly,

while the income concept is quite close, since participants 91

100.00

Food Stamp

45.97

0.50

5.01 2.36 0.98

15.40 11.26 10.51

(%) 2/

Participants

Rate of

(%)

45.97

43.87 28.74 16.03 5.72

72.93

70. 30 80.37

Participation

1970 Census and Puerto Rico Department of Social Services

of population

_3/ Percent of Food Stamp Program participants divided by percent

_!/ In 1969 dollars _2/ As percent of 1975 population

Sources:

TOTAL

3.78

6.13

8.74 5.21

6.11

- 2,999 - 3,999 - 4,999

- 5,999 6,000 - 7,999 8,000 - 9,999 10,000 -14,999 15,000 & over

2,000 3,000 4,000 5,000

21.90 14.01 14.41 11.42 8.21

tion {%)

Popula

Under - 1,000 1,000 - 1,999

Annual 1/ Income ($) ~

Table V.l: PERCENT OF POPULATION RECEIVING FOOD STAMPS

were analyzed with respect to their gross cash income,there is the limitation that data from the Department of Social

Services refer to

monthly income (November 1975), which

was multiplied by 12 to arrive at annual income, while the Census gives the annual rate of income.

Thirdly, it has

been assumed that income distribution has not changed.

Nev

ertheless, as expected, participation is higher at lower income levels; moreover, about half of Puerto Rico's pop

ulation participates in the Food Stamp Program. B.

Household Size and Income Level in the Survey Areas

What is the picture revealed by the surveys?

As was

indicated in Table III.3, 523 households were surveyed in

November 1975 representing 3.8 percent of all eligible fam

ilies in the survey

areas.

Of these, 40 households had

to be discarded; hence the results below are based on 483

responses: Obrero.

184 in Moca, 162 in Guayama,and 137 in Barrio

The latter are all urban households.

Moca is over

whelmingly rural, with only 5 percent of the households living

in urban districts. in Guayama the families are divided almost equally between urban and rural areas, about 52 per

cent of all households surveyed are rural.

The overall mean

household size is five members; it is six in Moca, five in

Guayama, and four in Barrio Obrero, indicating a decline with the degree of

urbanization.

Table V.2 presents the panorama of all the households

interviewed by household size and level of cash income as declared by the respondents.

bonus food stamps.

Cash income does not include

Table V.3 gives the same type of infor

mation by number of persons,

in the three survey areas

taken together, the mean household size increases with the

level of income, rapidly at first from 2.2. persons to around 5 persons and then gradually

to about 8 persons in

the monthly cash income bracket of $240 to $270; it declines thereafter to about 6 persons.

Households with six members

or less constitute almost three fourths of all the house

holds surveyed. Most households are concentrated in the lower income

brackets;

$210.

80 percent have monthly incomes of less than

Since the distribution of households by size varies

among income levels, the percentage distribution of persons by income level differs from that of the households.

Table

V.3 indicates that although close to 75 percent of the

household members are concentrated in income groups under $210 a month, their concentration in the first two income

270-299

300-329

14.3

1 -

1 3

1 1 1

11.4 11.8

13.0 10.4

1 -

2.7

^ Excluding households not having reported incrane.

274.2

5 1.0

2.7

â&#x20AC;&#x201D;

130.6 165.7 159.2 198.1 146.7

5.6

6.2

7.0

11.6

226.6 2.3

7.9 11 1

193.4 4.4 7.0

21 3

6 11

226.5

483 100.0

100.0

133.7

2.3

5.7 6.3

5.0

399.3 625.0

1.2

5.8

1.4

342.4 367.2

2.1 1.0

9.1

284.3

313.4

3.1 1.6

5.5 4.8

2.3

247.2

160.4 8.9

6.4 43 1

134.0 7.3

8.3

5.2

73.5

101.5 12.0 5.4

5.0

15.5

42.9 5.3

3.9

15.9

13.5

15.1

2.2

come^/

In-

Dist'n

Size

Total

13+

Mean Percent

Mean

Income ($) 46.4 103.6 133.4142.7 147.7 1725

Mean ^

Percent

Total

Reported

Income not

420 or more

390-419

360-389

240-269

330-359

210-239

180-209

8 -

15<?'-179

120-149

90-119

60- 89

0- 29

30- 59

Household Size

Number of Households

NUMBER OF HOUSEHOLDS,BY HOUSEHOLD SIZE AND INCOME LEVELSMOCA, GUAYAMA, BARRIO OBRERO,NOVEMBER 1975

{$)

Income

Monthly

Table V.2;

120-149

150-179 180-209

44.5

7.1

4.6

51.8

171

■t

110

29.5

28.8

18.7

9.5

14.0

10.4

10.5

35.7

238

336

250

252

24 •

17.7

19.8

13-3

6.0

5.4 10.1

10.0

20.7

143

130

243

240

Household Size

Number of Household Members

a/Excluding those not having reported income.

Income

Mean

(5)^

2.9

Per-cent

Total

reported

not

or more

Income

420

390-419

360-389

300-329

330-359

270-299

240-269

210-239

90-119

60- 89

30-

Monthly Income ($)

22.9

2.5

100.0 6.5

15.5

2,399

153

276

187

291 206

399

284

144

Total

157

13+

100.0

1,1

2.9

1.4

1.2

3.7

1.5

3.4

3.6

6.3

11.5

7.7

8.5

12.1

16.6

11.8

6.0

bution

Distri-

Percent

98.2

70.5

63.3

38.0

66.0

52.0

30.9

31.1

30.1

26.0

20.2

13.8

11.0

7.2

(?)

Income■

Mean

TABLE V.3: NUMBER OF HOUSEHOLD MEMBERS, BY HOUSEHOLD SIZE AND INCOME LEVEL: MOCA, GUAYAMA, BARRRIO OBRERO, NOVEMBER 1975

levels is less than that of the households.

Twenty-seven (5.6 percent) of the households

surveyed

have not participated in the Food Stamp Program over the

year.

We shall return to the reason for not doing so.

than half of these families are small sized households and

about one-half have monthly incomes of $270 or more (Table V.4).

The panorama that emerges when these households are

excluded is given in Tables V.5 and V.6 and does not differ from the profile of all households and persons.

tration of incomes is slightly

The concen

higher in that 83 percent

of participant households and 76 percent of participant in dividuals have monthly incomes under $210.

There are more

participants in six member households than in any other sin gle household size group. Only a handful of the households interviewed in 1974-

75 has an income level above the poverty threshold

speci

fied in the 1970 Census for different household sizes as

updated to 1975 using the consumer price index.

The highest

monthly income reported in 1974 was $307 in Moca, $500 in

Guayama, and $672 in Barrio Obrero.

For 1975, the figures

are $800, $800, and $1,139, respectively.

Although the

results cannot be used to draw reliable inferences relating to

vo 00

Note:

—

were

participating in

3 2

All households with 7 members the Food Stamp Program.

Total

—

420 or more

330-359 360-389 390-419

270-299 300-329

1 1

—

1 -

210-239

240-269

HouflcHold Size TOTAL

MOCA, GUAYAMA , BARRIO OBRERO, NOVEMBER 1975

Number Of Households

AND INCOME LEVEL:

NON-PARTICIPATING HOUSEHOLDS,BY HOUSEHOLD SIZE

180-209

1 1

120-149 150-179

90-119

1 1

0- 29 30- 59 60- 89

Income

Monthly

Table V.4:

60- 89

90- 119

60 10.1

11.6

7.5

6.6

Household Size

5.9

Number of Households

2.8

1.1

Mean

Per-

456 5.1

7 4.0

6 8.0

5 5.6

2 9.0

10 9.1

7 5.3

12 6.2

10 8.4

20 7.4

43 6.4

33 5.6

37 5.3

55 5.2

74 5.3

71 3.9

64 2.2

2.4 100.0

73.4

42.8

16.0

n come

Mean

100.0

1.5

124.0

1.3 545.3

1.1 400.0

0.4 364.5

2.2 342.4

1.5 311.7

2.6 284.2

2.2 247.7

4.4 226.6

9.4 193.4

7.2 160.4

8.1 133.9

12.1 101.4

16.2

15.6

14.0

13+Total Size Dist

32.4 85.8 112.4 133.0 156.3 147.7 130.1 165.7 159.2 198.1 146.7 274.2 226.6 124.0

13.2

11.4

13.6 11.0

1975

^ Excludes households not having reported income,

Income($)

Mean ^

Per Cent

Total

Reported

Income not

420 or more

390-419

360-389

330-359

300-329

270-299

240-269

210-239

180-209

150-179

120-149

0-29

NOVEMBER

NUMBER OF FOOD STAMP HOUSEHOLDS,BY HOUSEHOLD SIZE AND INCOME LEVEL'. MOCA, GUAYAMA, BARRIO OBRERO,

30- 59

($)

TABLE V.5;

Monthly

60 - 89

90 -119

390-419

240

318

238

6 â&#x20AC;&#x201D;

240

243

9.9 13.7 10.3 10.4 10.5

230

8 4

6.7 10.4

156

Household Size

5.6

130

Nvimber of Participants

6.2

143

2.6

6.2

395

13.7

2,317 100.0

157

100.0

1.2

24.3

76.1

71.4

1.9

1.5 34 43

40.5

38.0

58.8

45.8

29.1

0.8

3.9

1.6

3.2

3.7

30.2

29.8

6.6

28.8

25.3

19.5

11.9

8.0

8.5

12.2

17.1

11.0

7.1

Income

184 276 152

197

283

12.0

143 278

Dist'n

cent

Per

Total

6.8

13+

32.2 42.9 37.5 33.3 31.3 24.6 18.6 20.7 17.7 19.8 13.3 22.9 15.9

100

4.3

2.7

1975

^ Excludes households not having reported income.

Income ($)

Mean ^

Per cent

Total

Reported

Income not

420 or more

330-359

360-389

300-329

270-299

240-269

210-239

180-209

150-179

120-149

0-29

30 - 59

($)

Income

OBRERO, NOVEMBER

TABLE V.6: NUMBER OF FOOD STAMP PARTICIPANTS,BY HOUSEHOLD SIZE AND INCOME LEVEL*. MOCA, GUAYAMA, BARRIO

the overall distribution of income in Puerto Rico, there

is evidence of inequality in this tail end, indicated by the small share of income received by a high percentage of

the households with low monthly income and the large share of income received by a small percentage of households with high monthly income.

The results of the 1974 and 1975 sur

veys are summarized in Table V.7 below, which refers to all

households and their cash incomes, excluding bonus food stamps. While in individual years, income is unequally distrib

uted among households,which is evident from the large share of income (about 33 percent) received by the top 10-12 per cent of the families, there appears to be a movement towards

a more equitable distribution of income among these low in come families. For instance, in 1974, 43 percent of the

families were concentrated in the two lowest monthly income groups (less than $60), with an income share of 11 percent; in 1975, however , about 44 percent of the families are in

income groups under $90 a month, receiving 15 percent of the

total income. Figure V.2 shows the Lorenz diagrams for these

two distributions; the movement of the curve upward towards the diagonal is indicative of distributional improvement. Reservations are in order, however, with respect to the

101

Table V.7:

INCOME DISTRIBUTION BY MONTHLY INCOME LEVELS: MOCA, GUAYAMA, BARRIO OBRERO 1974 and 1975.

Monthly

Income

(%)

1975

1974

1975

23.7 19.7

13.5

15.1

89 119 149 179

13.0 8.4 8.4 6.0

3.2 7.5 8.5

209 239 269

6.0 2.5 2.5 1.8 8.0

0 30 60 90

120

150

180 210 240

270 300

Households(%) 1974

Income (?)

299

TOTAL

100.0

102

15.5 12.0 8.3 7.3 9.0 4.4 2.1 3.1 8.3

100.0

7.6

1.6 4.9 8.7 9.2

9.9 8.7

8.4 8.8

10.4 4.9 5.6 4.5

13.1 7.5 4.3 6.7

29.2

26.8

100.0

Figure V.2:

DISTRIBUTION OF INCOME, EXCLUDING BONUS FOOD STAMPS:

MOCA, GUAYAMA, BARRIO

OBRERO, 1974 AND 1975

Percent of Income

100

Percent of Households

103

100

results.

For one, the universes are not identical between

the two years. Secondly, price level changes, to the extent that they are reflected in rises in cash income, may

move

households into higher income brackets without necessarily increasing their standard of living.

Nevertheless, that

the same percentage of households at the bottom of the scale received a higher share of total income,and the decline, albeit small, in the

relative income share of the top in

comes are indicative of a less inequitable primary distri bution of income. C.

The Impact of the Food Stamp Program on Household Income

To gauge the impact of the Food Stamp Program on the distribution of income, we have added the value of bonus

food stamps to the cash income of the households surveyed and then regrouped the resulting distribution by the same

monthly income levels. tributive

As Table V.8 indicates the redis-

impact of the bonus food stamps shifts the house-'

holds massively into higher income brackets.

For example,

while 29 percent of the households had an income under $60 a month in the absence of the Program, the number of such

families is reduced drastically with the Program so that their relative importance falls to 1.1 percent. 104

To take

TOTAL

300 or more

120-149.99 150-179.99 180-209.99 210-239.99 240-269.99 270-299.99

0- 29.99 30- 59.99 60- 89.99 90-119.99

Income

Monthly

100.0

8.2

41.5

66.5 73.2

100.0

4.3 6.7 26.8

88.1

91.2

99.6

2.1

3.1

8.3

100.0

58.5

8.9

62.2

7.5

86.0

4.4

100.0

50.3

6.6

54.7

100.0

34.8

41.4

6.9

41.6

8.8 13.1

72.6

81.6

9.0

27.9 6.2

7.3

21.7

6.2

32.8

9.2

8.4

56.1

64.4

15.5

4.0

8.3

24.4

11.5

1.1

10.4

Percent

Households

100.0

62.0

8.4

8.2

5.5

4.9

3.7

2.9

1.6

2.6

0.2

100.0

38.0

29.6

21.4

15.9

11.0

7.3

4.4

2.8

Percent

Total Income

Post-Food Stamp Program

12.0

15.2

8.7

6.5

Percent

Cumulative

1.6 4.9

Percent

44.1

28.6

Percent

Cumulative

Cash Income

15.1 15.5

13.5

Percent

Households

Pre-Food Stamp Program

MOCA, GUAYAMA, BARRIO OBRERO, 1975

Table V.8; PERCENTAGE DISTRIBUTION OF INCOME, PRE- AND POST-FOOD STAMP PROGRAM:

another example, while only about 18 percent of the families

reported a monthly cash income of $210 or more, after taking account of bonus food stamps 65 percent of the families are

located in these income groups.

The Lorenz diagram of the

redistributive impact of the Program is shown in Figure V.3. What is the impact of the Program on households of dif

ferent size with different monthly income levels?

The an

swer to this question is provided in Tables V.9 and V.IO.

The information of Table V.9 is elaborated in greater detail in Table V.IO.

It shows clearly the crucial impact of the

Food Stamp Program on participating households in providing

added income to be spent on food purchases.

Within a given

income level, the importance of bonus food stamps rises in general with household size; within a given household size the importance of bonus food stamps falls with the income

level.

The table shows that for a large number of families

the bonus is more than twice as high as the household cash

income and in some instances it is 20 to 25 times higher. A combined analysis of Table V.9 and Table V.5 reveals that

for 125 out of 449 participating households, i.e. 27.8 per cent, the bonus represents an added income of 90 percent or less.

For all households taken together the bonus more than

106

Figure V.3:

DISTRIBUTION OF INCOME, WITH AND WITHOUT BONUS FOOD STAMPS; MOCA, GUAYAMA, BARRIO OBRERO, 1975

Percent of Income 100

/; / / • 80

/ •

/; / .

/ ' /

60 / /

4 •

Including^ Food

Stamp /

Bonu^

• •

40 /

« ■ a

Excluding Food Stamp Bonus

Percent of Households

107

100

239

269

299

329

359

389

419

210-

240-

270-

300-

330-

360-

390-

2.79

—

•

.21

•

.36

.65

1.57

—

.29

.26

.21

.34

.62

1.02

2.01

3.86

.16

.31

.38

.67

.71

1.09

1.19

3.06

11.16

.22

.21

.29

.41

.30

.49

.48

.64

.69

1.00

1.19

2.28

3.43

8.36

-95

.14

.43

.21

.33

.39

.60

.82

.88

1.08

1.48

2.16

4.14

21.05

1.17

.14

.40

.36

.49

.66

.82

.78

1.03

1.38

2.33

2.76

3.69

.68

.63

.76

.78

.64

.87

1.02

1.21

2.39

3.12

4.19

1.63 1.25

.37

.48

.65

.76

1.06

1.26

1.53

2.28

2.99

4.60

Household Size

Bonus as Ratio of Cash Income

3/ Cash incGmie was reported to be zero.

Total

420 or more

209

149

120-

179

119

90-

150-

60-

180-

30-

(?)

Income

Monthly

1.56

.31

.54

.71

1.22

1.52

1.90

2.98

3.38

5.64

26.44

1.52

.99

1.09

1.56

1.42

2.84

4.48

1.37 1.99

.40

.80

1.02

1.01

1.44

2.16

2.52

6.32

12.64

.99

.77

1.16

1.31

1.15

HOUSEHOLD SIZE AND INCOME LEVEL: MOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

Table V.9: IMPACT OF THE BOtfUS FOOD STAMPS OK CASH INCOME OF PARTICIPANT HOUSEHOLDS, BY

1.40

.95

.83

1.54

1.48

.91

1.95

3.69

13+

All

1.21

.33

.38

.71

.59

.39

.55

.86

.83

.86

.95

1.20

1.55

2.33

3.26

5.07

Holds

House-

Table V.IO;

THE IMPACT OP THE FOOD STAMP PROGRAM ON INCOME OP PARTZCXPANT HOUSEHOLDS, BY HOUSEHOLD SIZE AND INCOME LEVEL: HOGA, GUAYT^,

BARRIO OBRERO, NOVEMBER 1975

MontiiLy TncGmo

($)

Number ..of Households

Total

Mean Income

Income

($)

(?)

Mean

Bonus

(«

($)

Bonus

as % of Income

Income

incl. Bonus

($)

Household Size 1

0 -

17.0

751

2.084

47.4

278.9

2,848

30 -

38.2

229

360

60.0

157.1

589

60 -

67.6

473

307

64.9

780

90 - 119

98.5

394

140

43.9 35.0

35.s

534

120 - 149

150 - 179

180 or•

Total

150.0

150

32.0

21.3

182

1,997

2,923

47.2

145.4

4,933

386.1

•491 1,839 1,421 1,476

—

32.4

Household Size 2

0 -

20.2

101

390

78.0

30 -

38.2

611

1,228

76.8

200.9

704

717

79.7

101.8

78.2

90 - 119

101.3

912

564

62.7

61.8

120 - 149

142.0

142

48.0

33.8

190

150 - 179

169.3

508

129

36.3

21.4

637

180 - 209

197.2

789

202

50.5

25.6

991

210 - 239

219.0

438

125

62.5

28.5

563

60 -

240 or more

Total

85.8

4,205

109

3,403

69.5

80.9

—

7,608

Table V.IO: (CONT'D.)

Monthly Income

(?)

Number

Mean

oÂŁ Households

Income

($)

Total Income

(?)

Mean

Bonus

(?)

($)

Bonus

as % of Income

Income

incl. Bonus

($)

Household Size 3

0 -

12.7

424

141.3

1,115.5

462

30 -

37.9

531

1,624

116.0

305.8

2,155

60 -

77.5

465

1,005

540

90.0

116.1

90 - 119

99.3

397

434

108.5

109.3

831

120 - 149

132.0

924

656

93.7

70.9

150 - 179

156.0

780

522

104.4

66.9

180 - 209

194.3

1,166

531

88.5

45.4

1,580 1,302 1,697

210 - 239

228.0

228

86.0

37.7

314

240 - 269

250.0

500

192

96.0

38.4

692

270 - 299

288.0

288

88.0

30.5

376

300 - 329

302.0

302

48.0

15.8

350

91.6

10,764

330 or more

Total

112.4

5,619

5,145

102.9

Household Size 4 552

0 -

14.8

493

123.2

235.6

30 -

44.4

444

152.2

342.7

1,966

226.8

2,26 5

90 - 119

108.5

868

,522 1, ,572 1, ,030 1,

128.7

118.6

120 - 149

134.7

808

807

135.3

100.4

150 - 179

159.4

797

547

109.4

68.6

180 - 209

194.6

973

618

123.6

63.5

1,898 1,615 1,344 1,591

60 -

69.3

693

157.2

210 - 239

233.0

233

111

111.0

47.6

344

240 - 269

240.0

240

117

117.0

48.7

357

270 - 299

288.0

576

173

86.5

30.0

749

300 - 329

300.0

300

124

124.0

41.3

424

340.C

340

100

100.0

330 - 359

360 - 389

390 - 419

400.0

800

169

84.5

21.1

969

420 or

449.0

449

100

100.0

22.2

549

133.0

7,580

7, ,483

131.3

98.7

15,063

Total

110

29.4 -

440 -

Table V.IO: (CONT'D.)

Monthly Income

Number

Mean

Income

Households

($)

Total

Mean

Income

Bonus

($)

(?)

($)

Bonus

as % of

Incom<

incl. Bi

($)

Income

Household S ize 5 29

7.0

442

147.3

30 -

42.8

385

1,593

177.0

2,104.7 413,7

60 -

69.0

345

745

149.0

215.9

463

1,978 1,090 2,052 1,673

90 - 119

103.5

828

1,224

153.0

147.8

120 - 149 150 - 179

134.0

804

869

144.8

108.0

"173.0

173

152

152.0

87.8

325

180 - 209

189.0

567

464

154.7

81.8

134.0

60.2

1,031 1,426

210 - 239

222.5

890

536

240 - 269

270 - 299

285.0

570

220

110.0

38.5

790

300 - 329

317.5

635

212

106.0

33.3

847

355.0

355

330 - 359 360 - 389

74.0 -

20.8 -

429 -

390 - 419

400.0

400

173

173.0

43.2

573

420 or more

580.0

580

83.0

14.3

663

156.3

6,553

6,787

147.5

Total

94.4 13,340

Household Size 6 0-

30 -

60 -

51.8

414

1,529

191.1

369.3 275.5

1,943 2,910 1,130

70.5

775

2,135

194.1

90 - 119

100.0

400

730

232.5

120 - 149

133.8

1,070

1,475

184.3

137.8

150 - 179

157.3

944

977

162.8

103.4

2,545 1,921

180 - 209

189.2

946

734

146.8

77.5

1,680

210 - 239

221.3

664

544

181.3

81.9

1,208

240 - 269

242.0

242

161

161.0

66.5

403

270 - 299

285.3

856

419

139,7

48.9

1,275

320.5

641

231

115.5

330 - 359

334.0

334

134

134.0

360 - 389

300 - 329

390 - 419 420 or more

Total

872 468

540.0

540

74.0

147.7

,826 7,

9,143

172.5

Ill

36.0 40.1

13.7

116.8

614

16,969

Tal)le V.IO: (CONT'D.)

Monthly Income

(?)

Number

Mean

oÂŁ Households

Income

($)

Total

Mean

Income

($)

Bonus

($)

Bonus

as % of

Income

incl. Bonus

(?)

Income

H ousehold S ize 7 0 -

30 -

60 -

76.0

90 - 119

97.6

488

53.0

159

672

244.0

836

2,502 1,114 1,062

227.5

831

299.2

3,338 1,602 1.757 1,807

222.8

228.2

212.4

152.8

120 - 149 150 - 179

139.0

695

160.0

800

1,007

201.4

125.8

180 - 209

183.0

183

194

194.0

106.0

210 - 239

239.0

239

182

182.0

76 .1

280.0

240 - 269

270 - 299

300 - 329 330 - 359

360 - 389 390 - 419 420 or

Total

1 ~

280

182

342

164

400.0

400

146

342.0

130.1

4,422

7,225

112

182.0 -

164.0 -

146.0

65.0 -

47.9 -

36.5 ~

212.5

460.3

163.3

377 421 -

462 -

506 -

546 -

11,647

Table V.IO: (CONT'D)

Monthly

NunOser

Mean

Incane

Income

($)

Households

Total

Mean

Income

($)

Bonus

($)

(5)

H ousehold size

0- 29

00.0

30- 59

58.0

116

60- 89

80.4

402

90-119

99.6

498

120-149

150-179

162.7

180-209

210-239

240-269

Bonus

Income

as % of

Incl. Bc

192.0 243.0

418.9

602

1,657 1,689

251.0

312.1

238.2

239.1

488

591

197.0

121.1

194.5

1 167

1,191

198.5

102.0

225.5

451

394

197.0

87.3

192

192 486

1,255 1,191

(?)

Income

1,079 2,358 845 -

270-299

278.0

278

179

179.0

64.3

457

300-329

304.0

304

237

237.0

77.9

541

330-359

332.0

332

253

253.0

76.2

585

360-389

369.0

369

231

231.0

62.6

600.

390-419 420 or more

400.0

400

272

272.0

68.0

672

Total

16 5.7

—

4 805

6,472

—

206.4

124.6

11,277

Household Sise 9 0- 29

9.0

476

238.0

2,644.4

494

30- 59

49.5

558

279.0

563-6

657

60- 89

1,072 1,088

268.0

338.1

90-119

272.0

298.3

1,389 1,464 1,085

79.3

317

94.0

376

120-149

124.7

374

711

237.0

190.1

150-179

156.5

313

476

238.0

152.0

789

1 376

1,684

240.5

122.3

3,060

180-209 210-239 240-269 270-299

300-329 330-359

7 _

1 _

360-389

390-419

420 or more

Total

196.6 _

284.0 _

340.0 _

284

201

340

182

201.0

70.7 -

182.0 -

53.5 -

485 -

522 -

800.0

800

246

246.0

30.7

1,046

159.2

4,297

6,694

247.9

155.7

10,991

Table V.IO: (CONT'D)

Monthly Income

Number of

($)

Households

Mean Income

($)

Total xncome

($)

Bonus

Mean Bonus

Bonus as % of

Income incl. Bonus

($)

{$)

income

($)

Household Size 10 0- 29

25.0

316

316.0

1,264.0

341

30- 59

50.0

316

316.0

632.0

366

60- 89

90-119

107.5

215

542

271.0

252.0

757

120-149

139.0

139

300

300.0

215.8

439

150-179

180-209

190.3

571

824

274.7

144.3

210-239

233.0

233

235

235.0

100.8

468

240-269

250.5

501

512

256.0

102.1

1,013

270-299 300-329 330-359 360-389

390-419 420 or more

Total

1 _

360.0 _

360 _

1,395

287 _

287.0 _

79.7 _

647 _

481.0

481

190

190.0

39.5

671

198.1

2, ,575

3,522

270.9

136.7

6,097

Household Size 11

0- 59 60- 89

90-119 120-149

1,522

304.4

447.6

1,862

101.0

202

574

287.0

284.1

776

142.4

417

245

245.0

180

281

281.0

156.1

231

251

251.0

108.6

482

1,001

172.0

172

180-209

180.0

210-239

231.0

Total

340

300 or more

68.0

150-179

240-269 270-299

461

252.0

504

497

248.5

98.6

278.0

278

422

422.0

151.7

700

,907 1,

3,792

291.7

198.8

5,699

â&#x20AC;&#x201D;

146.7

Table V.IO: (CONT'D)

Monthly Income

($)

Number of

MeÂŁUi

Mean

Total

Income

Households

(?)

Bonus

(?)

Bonus

Bonus ($)

as % of Income

Income

incl. Bonus ($)

Household Size 12 0 - 179

180 - 209 210 - 239

200.0

200

229

229.0

227

297

240 - 269

250.0

250

291

297.0 291.0

114.5 130.8 116.4

429

227.0

347.0

694

535

267.5

77.0

1,229

274.2 1,371

1,352

98.6

2,723

524 541

270 - 299

300 - 329 330 - 359 360 or more

Household Size 13+ 0 -

30 -

60 -

00.0 -

80.0

319 -

295

319.0 -

295.0

368.7

319 -

375

90 - 119

120 - 149

496

150 - 179

168.0

168

328

328.0

195.2

180 - 209

197.0

197

179

179.0

90.8

376

210 - 239

229.7

698

1,021

340.3

148.1

1,719

153.7

609

240 - 269

270 - 299

300 - 329

330 - 359

240.0

343.5

240

369

687

567

360 - 389

390 - 419

420 or more

Total

369.0

283.5 -

82.5

1,254

422

400

400.0

94.7

822

226.6 2, ,492

3,478

316.2

139.5

5,970

422.0

115

Table V.IO (CONT'D)

Monthly

Number

Income

Households

($)

Mean

Total

Income

($)

Mean

(?)

Bonus

($)

(ยง>

Bonus

as % of

Income

incl. Bonus

($)

Income

ALL HOUSEHOLDS 16.0

42.8

0 -

30 -

60 -

73.4

90 - 119

101.4

120 - 149

133.9

150 - 179

160.4

180 - 209

193.4

226.6

210 - 239

240 - 269

247.7

270 - 299

284.2

300 - 329

311.7

330 - 359

342.7

1,013 3,038 5,430 5,578 4,956 5,293 8,315 4,532 2,477 3,410 2,182 3,424

5,136

80.3

501.9

9,888 12,662 8,631 5,928 5,006

139.3

325.5

7,131 3,782 2,139 1,884

171.1

233.1

156.9

154.7

160.2

119.6

151.7

94.6

165.8

85.7

189.1

83.4

213.9

86.4

157.0

55.2

852

121.7

39.0

2,009

200.9

58.6

6,162 12,926 18,092 14,209 10,884 10,299 15,446 8,314 4,616 5,294 3,034 5,433 1,247

360 - 389

364.5

729

518

259.0

71.1

390 - 419

400.0

760

152.0

38.0

2,760

420 or

545.3

2,000 3,272

1,093

182.2

33.4

4,365

449

123.9

55,649

67,419

150.2

121.1

123,081

Total

This table refers only to participating households having reported income.

It, therefore, excludes data on seven households Who have

inadvertently not declared their incomes.

116

doxibles their cash income.

Undoubtedly, the Food Stamp Pro

gram has injected substantial purchasing power into the

three municipalities.

The injection of $67,419 in November

1975, as reported by the surveyed households (see Table V.IO,

last line of column four), is equivalent to 0.2 percent of the total bonus recorded by the Puerto Rico Department of Social Services in the same month for all of Puerto Rico.

Granted, the bases of the two sources of information differ,

but

the bonus per interviewed household in the three areas,

which stands at $148, is $33 higher than the average rec orded in the files of the Social Services Department for the same month.

Of the total bonus, 45.8 percent ($30,900) was reported

in Moca and 34.4 percent ($23,198) in Guayama? these two areas, where 71.6 percent of the families were surveyed, accounted, therefore, for 80.2 percent of the net benefits of the Program. D.

Demographic

and Occupational Characteristics

The following paragraphs summarize the demographic and

occupational characteristics of the households surveyed.

There was no significant overall change in the 1975 profile over that of 1974; hence the subsequent paragraphs refer to

117

1975 and no comparison is made with the findings of 1974, unless when there is an important difference between the

two years.

Since only 27 households (5.6 percent) do not

participate in the Food Stamp Program, the results are taken to equally represent the profile of the participating fam ilies.

The population is young:

about 56 percent of the

household members are 18 years of age or less; four-fifths of these are concentrated in families with monthly incomes

under $240 (Tables V.ll and V.12). 2.

The overwhelming majority (85 percent) of those who

are 18 years or younger consists of students and pre-school children.

Some of these who are 18 and younger are unem

ployed (3.2 percent); others claim they are unemployed but are not seeking work (2.7 percent). are

The young unemployed

concentrated in the lower income groups and in the

larger households (Tables V.13 and V.14).

The family profile of the households is determined

by the status of members who are 18 years or older.

These

include heads of households, spouses, and other members. Nearly 42 percent of the households surveyed are headed by a female.

The ratio of female to male heads is highest

118

150- 179

180- 209

210- 239

240- 269

270- 299

22.9

270

11.3

Total

Percent

550

Not indi-

cated

â&#x20AC;&#x201D;

390- 419

420

360- 389

22.0

530

300- 329

13-18

330- 359

120- 149

108

6-12

0-5

119

60-

30-

(?)

Income

Monthly

11.9

286

19-29

2,399

102

4.3

135 5.6

264

11.0

262

10.9

100.0

1.2

2.9

1.4

2.8 1.2

1.6 29

38 90

3.7

3.4

6.4

11.5

7.8

8.6

12.1

16.6

11.8

6.0

Percent

153

276

187

206

291

399

284

144

Total

71 or more

61-70

46-60

30-45

Age Groups

MOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

Table V.ll: NUMBER OF HOUSEHOLD MEMBERS,BY AGE AND INCOME LEVEL;

Total

270

13 or more

550

6-12

0-5

Size

Household

530

13-18

286

19-29

262

30-45

264

46-60

135

61-70

MOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

102

71 or more

Table V.12; NUMBER OF HOUSEHOLD MEMBERS > BY AGE AND HOUSEHOLD SIZE:

2,399

157

143

130

243

240

238

336

250

252

171

110

Total

100.0

6.5

2.5

6.0

5.4

10.1

10.0

9.9

14.0

10.4

10.5

7.1

4.6

2.9

Percent

Total

reported

Income not

420 or more

390-419

360-389

330-359

300-329

270-299

240-269

210-239

180-209

150-179

120-149

90-119

60- 89

30- 59

0- 29

Time

Income

(?)

Part

Full

44 69

117

Total

1 -

Indicated

Not

ployed

Unem

rarily Employed

Tempo

In the Labor Force

wife

House

926

119

114

161

107

Student

capped

Handi

work

seeking

but not

Unemployed

Not in the Labor Force

224

Other

NUMBER OF HOUSEHOLD MEMBERS 18 YEARS OR YOUNGER,BY OCCUPATIONAL STATUS AND INCOME LEVEL*MOCA

BARRIO OBRERO, NOVEMBER 1975

Monthly

Table V.13:

1,233

157

144

219

147

Total

GUAYAMA,

1,350

171

102

164

245

160

Total

13 or more-

—

•

—

rily Employed

Time

Size

Part

Tempora

Full

House

—

ployed

Unem

In the Labor Force

cated

Indi

Not

117

Total

House

wife

926

114

103

122

131

Student

capped

Handi'

work

seeking

but not

ployed

Unem-

Not In the Labor Force

224

Other

1,233

106

149

139

142

187

122

Total

NUMBER OF HOUSEHOLD MEMBERS 18 YEARS OR YOUNGER,BY OCCUPATIONAL STATUS AND HOUSEHOLD

SIZEjMOCA, GUAYAMA, barrio OBRERO, NOVEMBER 1975

hold

Table V.14:

1,350

119

100

167

154

153

208

130

110

Tota;

among the 71 year or older group, 1.5 to 1.

Another striking

feature is that nearly 33 percent of the households are

headed by persons over 60 years of age and almost 50 per cent of these are headed by a female.

These households are

concentrated in monthly income levels of less than $150 and in small households(Tables V.15 and V.16).

Low income fe

male headed households are also prevalent among those house

holds whose heads are single, divorced, widow, or separated. Of the 217 households with single, divorced, widowed, and

separated heads, 179 (82.5 percent) are headed by females. These households are concentrated in

monthly income groups

under $150 (Tables V.17) and in one and two member households (Tables V.IB).

On the whole 55 percent of the 483 households

surveyed are headed by

married individuals (Tables V.19).

4. A great proportion (70.8 percent) of household heads, as shown in Table V.20, are not in the labor force because

of retirement (6.2 percent), some handicap (27.1 percent), being unemployed and not looking for work (5.8 percent), in school (0.8 percent), or having reported themselves to be

housewives (31 percent).

This is in contrast to the results

of last year survey when 53 out of a total of 562 household heads (i.e. less than 10 percent) had reported themselves

123

tsj

359

330-

not

Percent

Total

reported

Income1

420 or more

389

329

300-

419

299

270-

360-

269

240-

390-

209

239

179

150-

210-

149

120-

180-

119

30-

90-

60-

($)

Income

Monthly

0.2

18 or vounqer

5.0

4 9 12

41.8

8.3 58.2

total

202

281

71 and over

5.4

13.7 21.7 9.9 12.0 7.0

61-70

1 2

105

46-â&#x20AC;¢60 M

34 66

30--45 M

2.9 13.9

19-29

MOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

Table V.15; NUMBER OF HOUSEHOLDS,BY AGE AND SEX OF HOUSEHOLD HEAD AND INCOME LEVEL:

or more

Total

18 or younger

Size

Household

19-29

30-â&#x2013; 45

Age Groups

105

46- 60

61- 70

MOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

F M

and

over

281

Total

202

Table V.16: NUMBER OF HOUSEHOLD HEADS,BY AGE AND SEX OF HOUSEHOLD HEAD AND HOUSEHOLD SIZEj

60-

Total

Income not

reported

420 or more

390- 419

360- 389

330- 359

300- 329

240- 269

270- 299

210- 239

180- 209

150- 179

120- 149

90- 119

30-

Income ($)

Single

242

1 1

Divorced

Married

4 -

Separated

Widowed

MOCA, GUAYAMA, AND BARRIO OBRERO, NOVEMBER 1975

â&#x20AC;&#x201D;

Indicated

Not

202

2 1

281

Total

Table V.17; NUMBER OF HOUSEHOLDS, BY CIVIL STATUS AND SEX OF HEAD AND INCOME LEVEL;

8 9

13 or more

Total

242

Married

Single

Household Size

Widowed

Civil Status

Divorced

MOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

Separated

Indicated

Not

202

â&#x20AC;&#x201D;

Total M

281

Table V.18: NUMBER OF HOUSEHOLDS,BY CIVIL STATUS AND SEX OF HEAD AND HOUSEHOLD SIZEj

Monthly

60-89

90-119

120-149

150-179

Percent

Total

reported

Income not

19.3

8.5

54.9

10.3

6.8

Separated

Divorced

Widowed

265

Married

Civil Status

420 or more

330-359

300-329

270-299

390-419

240-269

360-389

210-239

180-209

0-29

Sinqle

30-59

{$)

Income

MOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

0.2

â&#x20AC;&#x201D;

Not Indicated

Table V.19: NUMBER OF HOUSEHOLDS, BY CIVIL STATUS OF HEAD AND INCOME LEVEL

100.0

483

Total

0- 29

360-389

Percent

Total

reported

Income not

3.9

5.8

5.2

420 or more

330-359

390-419

300-329

240-269

210-239

270-299

180-209

120-149

150-179

90-119

1.7

ness

ployee

Busi

rary

Own

2.9

8.7

28.2

136

27.1

131

2 4

4 -

6.2

2 1

30.9

149

0.8

5.8

—

6 -

Not

1 3

70.8

342

1.0

cated

Indi

work

seeking

not

Total

Unem

ployed

27 _

Student

wife

House

Retired

Not in the Labor Force

3 13

2 4

capped

Total

ployed Other

Handi

Unem

in the Labor Force

Tempo

60- B9

30- 59

Time

Income

(5)

Part

Full

100.0

483

Total

NUMBER OF HOUSEHOLDS, BY OCCUPATIONAL STATUS OP HEAD AND INCCM4E LEVELiMOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

Monthly

Table V.20:

«i«l

as housewives.

This is one important factor in explaining

the low income levels.

In addition# only one-fifth of those

in the labor force are employed on a full time basis.

to one-third are unemployed and another one-third have parttime work or are temporarily employed.

This is the second

factor in explaining the low incane levels (Tables V.20 and

V.21).

Male unemployed heads of households are larger in

number than female unemployed heads 5.

(Table V.22 and V.23).

A similar picture is observed in the case of house

hold members 18 years or older who are not household heads. The handicapped and the unemployed are predominant.

gether they account for more than one-third of this popula tion.

Only 4.6 percent of them have full-time jobs; a sim

ilar percentage is temporarily employed and about 3 percent have part-time jobs.

Around 12 percent are unemployed.

(Tables V.24 and V.25). 6.

The 1974 surveys yielded no conclusive evidence of

a positive correlation between level of schooling and level of income.

We should note, however, that it is very diffi

cult to determine whether income is low because of lack of

schooling, or there is a lack of schooling because of low income.

The analysis above seems 130

to indicate that factors

Total

Part

Size

—

Time

Full

Time

Family

—

ness

Em-

ployee

Busi-

rary

ployed

inTempoThe LaborOwnForce unem-

Other

136

Total

131

capped

Handi-

Retired

149

wife

Student

Not in the Labor Force

work

seeking

not

342

cated

ployed Total Indi

483

13 5

Total

Table V.21: NUMBER OF HOUSEHOLDS,BY OCCUPATIONAL STATUS OF HEAD AND HOUSEHOLD SIZE-. MOCA,GUAYAMA,BARRIO OBRERO, NOVEMBER 1975

0- 29

Total

reoorted

Income not

420 or more

360-389

390-419

330-359

270-299

240-269

300-329

210-239

180-209

120-149

150-179

90-119

60- 89

30- 59

Time

Income

(S)

Full

Time

Part

Job

rary

ness

Busi-

Own

3 -

ployed

Unem-

In the Labor Force

Tempo

NOVEMBER 1975

Other

122

2 -

Total M

149

wife

House-

dent

Stu-

red

Reti-

103

2Â»

11 13

Job

156

Not

cated

Indi-

186 3

3 5

13 21

Total

the Labor Force

Unemployed not seeking

26 26

caooed

Handi-

Not in

NUMBER OF HOUSEHOLDS,BY SEX AND OCCUPATIONAL STATUS OF HEAD AND INCOME LEVEL:MOCA, GUAYAMA, BARRIO OBRERO,

Monthly

Table V.22s

202

2 1

10 10

3 2

10 25

Total

13 or more

]

Time

Size

Full

Feunily

T^le V,23 ;

Time

Part

rary

Tempo-

Busi-

Own

7 5

Unem-

In the Labor Force

]975

Other

122

12 10

14 20

2 1

3 8

Total

149

21 23

dent

Stu-

wife

House-

3 1

red

Reti-

Unemployed

103

12 14

6 6

2 1

Job

not seeking

capped

Handi-

Not

186 3

15 17

31 15

Total

2 281 202

Gated

Total Indi-

156

Not in the L^or Force

NUMBER OF HOUSEHOLDS,BY SEX AND OCCUPATIONAL STATUS OF HEAD AND HOUSEHOLD SIZE: MOCA, GUAYAMA, BARRIO OBRERO,

NOVEMBER

4.6

Total

Percent

reported

Income not

420 ormore. 6

330-359

360-389

390-419

270-299

300-329

2.1

4.4

123

11.7

2.0

1.0

26.5

278

37.2

390

5 8

6 14

5.4

3.5

9 -

9 13

240-269

21.4

—

3 -

1 -

210-239

180-209

4.6

150-179

90-119

120-149

72.2

757

•7

102

113

78 105

1 6

3 8

11 18

seeking job

1.3

cated

not

capped

red

Student

Total

ployed

Wife

Total

ployed

Not

Indi

Unem

Handi

Reti

Other

House-

Unem

Not in the Labor Force

ness

Busi

Own

30- 59

60- 89

(S)

Job

Time

0- 29

rary

Part

Pull

Tempo

Income

Monthly

BARRIO OBRERO, NOVEMBER 1975

Table V.24: NUMBER OF HOUSEHOLD MEMBERS 18 YEARS OR CHJ3ER,BY OCCUPATIONAL STATUS AND HOUSEHOLD INCOME LEVEL'MOCA, GUAYAMA,

100.0

1 ,049

105

112

127

154

124

Total

—

Total

13 or more 3

—

Time

Size

Part

Full

Family

—

ness

Job

Busi'-

rary

Own

Other

the Labor Force

Tempo

123

ployed

Unem

BARRIO OBRERO, NOVEMBER 1976

278

Total

390

wife

House

Student

Retired

225

capped

Handi

,48

iob

seeking

not

ployed

Unem

Not in the Labor Force

757

101

Total

cated

Indi

Not

1.049

128

120

142

113

Total

Table V.25: NUMBER OF HOUSEHOLD MEMBERS 18 YEARS OR OLDER,BY OCCUPATIONAL STATUS AND HOUSEHOLD SIZEIMOCA, GUAYAMA,

other than schooling

play a much more significant role in

the determination of the prevailing low income level of the

surveyed population. Among them are the large number of handicapped persons and of families whose heads are widowed, separated, or divorced? the predominance

of young members

in the households; and the possibility that those with a

higher level of schooling may already have migrated to more prosperous areas.

The Impact of the Program

Four hundred fifty-six households participating in the Food Stamp Program have reported purchases of stamps

valued at $80,727 for which they paid $12,441.

Not all fam

ilies paid for the stamps (Tables V.26 and V.27).

It is

somewhat baffling that with gross cash incomes of less than

$30 a month, 15 households have reported having paid a total sum

of $301.

For according to the specifications in effect

in the first half of the fiscal year 1976, only one and twomember households with a monthly net income of $30 or less should have paid for food stamps, and the payment should have been $1.00.

free.

Larger size households receive the stamps

Now, the surveys indicate that there are 44 one-member

participant households and five two-member participant house-

136

240-269

270-299

300-329

330-359

reported

210-239

Note;

Total

357

456

12,441

80,727

465

1,558 884

216

698

378

827

551

2,167 1,142

1,348

1,107 1,395 1,188

549

301

Payment ($)

976

610

5,437 10,437 13,7^^9 10,026 7,116 6,354 9,298 4,924 2,690 2,711 1,230 2,707

Stamp Value ($)

68,286

867

1,093

760

518

.85

.98

.70

.78

.85

.69

.74

2,009

.69

.79

.77

.78

.83

.86

.92

.95

.94

Stamp Value

Bonus

852

5,136 9,888 12,662 8,631 5,928 5,006 7,131 3,782 2,139 1,884

Net Bonus ($)

figures, therefore, do not necessarily coincide with those of Table V.IO.

This table refers to all participating households having reported income or not; the

Income not

180-209

420 or more

150-179

90-119

120-149

360-389

60-89

390-419

Paying

0-29

Total Participating

30-59

No. of Households

Monthly

Income

MOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

Table V.26: FOOD STAMP VALUES, PAYMENTSi, NET BONUS,BY INCOME level:

No. of Households

Bonus

26 23

12 5

11 357

33 13

456

13+

Note:

Total

.84

.85

68,286

983

12,441

80,727

the figures, therefore, do not necessarily coincide with those of Tables V.IO.

This table refers to all participating households whether having reported income or not?

.78

1,352 3,478

.76

.85

.87

426

650

608

.86 .82

3,778 4,461

4,130 4,442

991

1. 257

1,990 1,002

3,522 3,792

.88

6,688 6,694

.82

7,225

11,133

8, 227 7,945 7,685

6,787 9,143

1,518

.86

901

6,294 9,125 8,305

1,325

.97 .83

2,923 3,489 5,393 7,800

103 687

3,026 4,176

Stamp 1

Net Bonus ($)

Payment {$)

Value ($)

Paying

Total Participating

Size

Household

MOCA, GUAYAMA, BARRIO OBRERO, NOVEMBER 1975

TAble V.27: FOOD STAMP VALUES. PAYMENTS, NET BONUS,BY HOUSEHOLD SIZE

holds in this low monthly income bracket (see Table V.5).

Their payment should not have exceeded $49,especially if one considers that the payment schedules of the Food Stamp Act relate to net income.

Whatever the reason for the discrep

ancy-lack of information, oversight in administrative trans actions, incorrect reporting - 15 households in this income group reported having paid for their stamps.

Naturally, as one moves up the income scale more hcxise-

holds pay for the purchase of the stamps.

The ratio of the

bonus (the difference between the value of the stamps andtheir

purchase price) to the value of the come.

stamps declines with in

In other words, the higher the income level, the higher

the price the household pays for one dollar's worth of food stamps.

In the lowest levels the price of a dollar's worth

of stamps appears to be around five cents; it rises to 30 cents in the highest income group.

The slight variation from

the tendency observed in income levels of $330-$420 a month

is explainable by the large mean household size registered in these groups (see Table V.5).

On the whole, the average

price paid for one dollar's worth of stamps appears to be 15 cents, which is half the price calculated from the statistics

in the files of the Puerto Rico Department of Social Services. 139

Undoubtedly, the surveys give greater emphasis to lower in comes:

according to records referring to November 1975 for

Puerto Rico as a whole, 14.5 percent of participating house

holds have incomesof $390 a month or more; in the surveys these households represent only 24 percent of the sample. The purchase price of the stamps is accordingly lower for

the survey population than for Puerto Rico as a whole. What is the impact of the Food Stamp Program on food and non-food expenditures?

The answer to this question can

be given by comparing the expenditures on food and non-food as registered in the 1974 surveys with those registered in 1975.

As indicated in Table V.28, total monthly cash income

reported in 1975 by 476 families amounted to $63,551; total purchases of stamps were valued at $79,870, and the bonus a-

mounted to $67,439.

Total monthly income of these families

(cash plus bonus) was, therefore, $130,990.

Weekly food ex

penditures have been reported to amount to $25,920; fourfifths of this amount represent purchases with stamps.

Mul

tiplying by a factor of 4.3, monthly food expenditures are roughly estimated to amount to $111,456; of this amount $88,664 have been purchased with stamps.

In other words,

cash food expenditures of $22,811 a month represent 35.9

140

63,551

1,836 2,396 6,875

79,870

1,558

976

610

2,707

5,437 10,437 13,804 10,026 7,108 6,354 9,298 4,929 2,690 2,711 1,230

($)

Stamps

67,439

1,093

760

518

2,009

852

5,136 9,888 12,697 8,631 5,933 4,986 7,131 3,782 2,139 1,884

($)

Bonus

130,990

4,858 6,148 3,359 5,433 2,354 3,156 7,968

11,294 10,601 15,446 8,540

6,169 13,017 18,127 14,520

($)

Plus Bonus

Cash Income

Excludes 7 households not having reported income.

Total

420

390- 419

360- 389

330- •359

300- 329

270- ■299

240- ■269

210- ■239

180- ■209

150- ■179

120- ■149

90- ■119

60- ■89

30- ■59

1,033 3,129 5,430 5,889 5,361 5,615 8,315 4,758 2,719 4,264 2,507 3,424

($)

0- ■29

Cash

Income

Monthly

Income

NOVEMBER 1975

25,920

651

538

356

853

226

1,087

846

1,823 3,125 3,901 3,390 2,850 1,982 2,792 1,500

20,615

399

135

734

827

563

1,509 2,540 3,333 2,897 2,366 1,442 2,515 1,185

5,305

252

403

262

119

150

260

283

315

277

540

484

493

568

585

314

Weekly Food Expenditures Total Stamps Cash

Table V.28: INCOME LEVEL AND WEEKLY FOOD EXPENDITURES; MOCA, GUAYAMA, BARRIO OBRERO

percent of cash incomes viiile according to the 1974 survey results, cash food expenditures in the absence of the Food

Stamp Program, on the whole, exceeded cash incomes by about 63 percent.

Yet a total food expenditure of $111,456 (with

cash and stamps) in 1975, represents an amount which exceeds cash incomes of $63,551 by 75 percent.

It is clear, there

fore, that not only food expenditures have risen in propor tion to cash incomes, but a great part of these expenditures

is now being paid with food stamps.

Between 1974 and 1975,

cash incomes per household have risen by about 7 percent in real terms (i.e in 1974 prices) and food expenditures per

household (paid with cash and stamps) have risen by twice this proportion, again in real terms.

The results should not

lead one to conclude, however, that the elasticity of demand for food is 2, since the inclusion of purchases with stamps in total food expenditures distorts the conceptual basis of any elasticity computation. sequent

In fact, as is indicated in sub

paragraphs, statistical computations

carried out

with the results of the 1974 surveys tend to show that at these low income levels the demand for food in general is inelastic with the elasticity coefficient being around 0.4; it could be, however, as high as 0.9 (see pagelSl below).

142

Estimates per household on which the following analy sis is based is given below: In

current prices _

In 1974 prices

1974

1975

Change

1975

Change

Food expendi $183.60

tures

$234.15

27.5

86.70

53.8

$210.90

14.9

79.50

41.1

Non-food

expenditures

56.35

Bonus

$141.70

$130.00

50.55

45.58

36.7

35.0

30.30

27.80

21.4

Change in food expenditures Change in food exp's as % of Bonus

Change in non food exp's

Change in non food exp's as % of Bonus Income

Note:

$112.4

$133.5

18.8

$120.30

7.0

All dollar values refer to monthly estimates per household.

Total monthly food expenditures per household are esti mated to amount to $234.15 in 1975, an increase of $50.55 per

household over 1974.

This is equivalent to an increase of

27.5 percent (in current prices),almost twice the rate of in crease of 13.1 percent implied by the estimates of the Puerto

Rico Planning Board.-^ ^ Economic Report to the Governor 1975, p.A-11.

143

The

Considering fhat the surveys emphasize lower income house holds (see p.94 above) a higher relative increase in the de mand for food is expected to result from them.

Total non-food expenditures were reported to amount to $41,262 a month in 1975 (see Table V.29), equivalent to

$86.70 per household in current prices and $79.50 in 1974 prices.

In 1974, spending per household in such items was

recorded to be $56.35.

This implies an overall expansion of

41.1 percent, a rate almost three times as high as that of

food.

Many explanations can be given: for one, the base from

which the increase is measured

is quite low in the initial

year? secondly, it is to be expected that non-food expendi tures will have a significant higher income elasticity than food; and, thirdly, having been bombarded with food stamps

which allow the households to satisfy their nutritional needs, it is to be expected

that the discretionary purchasing power

the Program releases will also be used towards the purchase of non-food items.

A comparison with the estimates of the

Planning Board for all families in Puerto Rico yields the

estimate per family was arrived at by using population and average household size figures given in the same report, p. A-1.

144

(-■

264

257

90- 119

120- 149

Total

7,552 927

9,650

436

177

188

199

104

447

126

935

654

548

1,281 1,735 1,023 1,176

621

Other

270

240

1,064 1,260

19,288

610

196

612

258

347

386

732 830

470

2,292 1,386

1,473

1,029 2,740 3,010 2,279 1,589

Items

Non-food

1,181

1,355 2,953 2,927 2,212 2,082 1,359 2,144 1,712

Total

21,974

Excludes 7 households not having reported income.

3,845

245

686

115

390- 419

420 or more

523

360- 389

85 275

126

132

300- 329

171 116

Recreation

Se^ices

330- 359

520

164

140

157

240- 269

317

270- 299

424

809

658

555

210- 239

227

561

841

908 695

617

Health

180- 209

150- 179

381

60-

593

Education

30-

Income

Monthly

NOVEMBER 1975 (DOLLARS)

41,262

1,304 1,870

454

959

656

3,671 2,832 4,436 3,098 1,202 2,011

2,384 5,693 5,937 4,491

Total

Table V.29: MONTHLY EXPENDITURES ON ITEMS OTHER THAN POOD; MOCA, GUAYAMA, BARRIO 6brER0»

result that the per household increase is 4.7 percent.^ It should once again be remembered that the surveys give

greater emphasis to lower incomes and the spending patterns of the aggregate economy cannot be held Valid for the behav ior of those at the bottom end of the income scale.

For

purchasing a larger portion of their food with food stamps, it is to be expected that such households would increase

their non-food spending by more than the national average of non-food spending.

It is possible to derive from these figures an estimate of the marginal propensity to consume food and non-food of

the bonus dollar.

Estimates of the marginal propensity to

consume food and non-food of the bonus dollar using the above figures appear to indicate that out of every additional

bonus dollar 35/< (in 1974 prices).

is being spent on food and 21/5 on non-food But is this a valid estimate?

As has been discussed previously (see p.104), changes in consumption expenditures occur not only because of the supplemental purchasing power the Program adds, but also

because of change in inframarginal incomes.

^ Report, ibid, p.A-11

146

Unless changes

in food expenditures due to the former can be separated from those due to the latter, it would not be correct to speak of a true marginal propensity to consume food of the bonus

dollar.

Otherwise the concept is subject to the same criti

cism as that of elasticity, for the inclusion of purchases

with stamps in total food expenditures distorts the concep tual basis of any elasticity computation, and therefore of any

marginal propensity to consume computation.

Nevertheless, given an income elasticity coefficient

of about 0.5, as estimated from the findings of the 1974 surveys, we have made the following simple calculation:

elasticity coefficient of 0.5 means that a 1 percent increase in income implies a 0.5 percent increase in food expenditures. Since per household income rose by 7 percent in real terms from 1974 to 1975, it is to be expected that this should re

sult in a 3.5 percent increase in real terms in food expend itures.

This is equivalent to $6.45.

in other words, of

the total increase in food expenditures of $45.55 from 1974 to 1975, $6.45 were due to changes in the basic income; the

remaining $39.10 can be attributed, perhaps, to the bonus of the Program.

This amount is 30 percent of the bonus expressed

in 1974 dollars.

Hence,

we can imply that the marginal

147

propensity to consume food out of the bonus dollar is .30. However, in the absence of demand elasticity data for non food items, a similar computation cannot be made for these

products. The only thing that can be said is that the sur vey results unequivocably demonstrate the crucial impact of the Program on food and non-food demand alike.

One other pattern that seems to emerge is the possible ocurrence of cash savings. If the cash expenditure figures of Table V.28 and V.29 are combined, it will be noticed

that monthly cash expenditures (on food and non-food ) are below cash incomes, while in 1974 cash food expenditures alone exceeded cash incomes by 63 percent.

Table V.30 gives the breakdown of food expenditures by

food categories. A comparison of the spending behavior of 1974 cannot be made, since similar queries were not made in the 1974 interviews.

Starchy vegetables, rice, meat and

poultry, and milk are the major items purchased and account altogether for about 35 percent of the purchases. We have used the results of the 1974 surveys to regress

food expenditures on levels of family income and family size

Regressions were run in current values and in logarithms be tween monthly expenditures on food and monthly income and

148

Table V.30:

FOOD EXPENDITURES BY CATEGORY:

MOCA,

GUAYAMA, BARRIO OBRERO, NOVEMBER 1975*

Percent

Expenditure