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The effect of the WIC program on consumption patterns in the cereal category

Author

Listed:
  • Romana Khan

    (Associate Professor of Marketing at Graduate School of Business)

  • Ting Zhu

    (Purdue University)

  • Sanjay Dhar

    (University of Chicago)

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this targeted food subsidy program is effective in creating behavior change that persists even after the incentive is withdrawn.

Suggested Citation

  • Romana Khan & Ting Zhu & Sanjay Dhar, 2018. "The effect of the WIC program on consumption patterns in the cereal category," Quantitative Marketing and Economics (QME), Springer, vol. 16(1), pages 79-109, March.
    • Handle: RePEc:kap:qmktec:v:16:y:2018:i:1:d:10.1007_s11129-017-9191-z
    DOI: 10.1007/s11129-017-9191-z
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    More about this item

    Keywords

    Public policy; Food subsidies; Brand management;
    All these keywords.

    JEL classification:

    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General

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