The Effect of the WIC Program on Consumption Patterns in the Cereal Category

Quantitative Marketing and Economics 16 (1), 79-109

43 Pages Posted: 12 Nov 2019

See all articles by Romana Khan

Romana Khan

affiliation not provided to SSRN

Ting Zhu

Purdue University - Krannert School of Management

Sanjay K. Dhar

University of Chicago - Marketing Management

Date Written: November 1, 2019

Abstract

The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is a federally-funded food assistance program for low income participants who are at nutritional risk. Beneficiaries receive vouchers for specific foods and brands, selected for their nutritional value. While the program is designed to improve nutrition, it may also induce changes in consumption behavior that persist beyond participation in the program. In this paper, we study how participation in WIC impacts the consumption patterns and preferences during and after the program. Our analysis focuses on the cereal category, in which the subsidized brands must meet certain nutritional guidelines. As expected, during the program households increase cereal consumption volume and shift their choices towards the WIC-approved brands. More interesting is that once households exit the program, the higher category consumption rate and elevated share of WIC brands persist. To understand the behavioral mechanism underlying these consumption patterns, we estimate a choice model and find an increased preference for WIC brands after controlling for state dependence. The evidence suggests that this targeted food subsidy program is effective in creating behavior change that persists even after the incentive is withdrawn.

Keywords: Public Policy, Food Subsidies, Brand Management

JEL Classification: J18, H71, M30

Suggested Citation

Khan, Romana and Zhu, Ting and Dhar, Sanjay K., The Effect of the WIC Program on Consumption Patterns in the Cereal Category (November 1, 2019). Quantitative Marketing and Economics 16 (1), 79-109. Available at SSRN: https://ssrn.com/abstract=3479193 or http://dx.doi.org/10.2139/ssrn.3479193

Romana Khan

affiliation not provided to SSRN

Ting Zhu (Contact Author)

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Sanjay K. Dhar

University of Chicago - Marketing Management ( email )

Rosenwald 331C
Chicago, IL 60637
United States
773-702-3005 (Phone)
773-702-0458 (Fax)

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