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Quantitative Marketing and Economics

, Volume 16, Issue 1, pp 79–109 | Cite as

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

Article

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this targeted food subsidy program is effective in creating behavior change that persists even after the incentive is withdrawn.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

Notes

Acknowledgments

We acknowledge the Kilts Center for Marketing at the University of Chicago Booth School of Business and Frank Piotrowski of AC Nielsen for providing access to the Nielsen Homescan and RMS data.

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Copyright information

© Springer Science+Business Media, LLC 2017

Authors and Affiliations

  1. 1.Associate Professor of Marketing at Graduate School of BusinessChicagoUSA
  2. 2.Associate Professor of Marketing at Krannert School of ManagementPurdue UniversityWest LafayetteUSA
  3. 3.Professor of Marketing at the Booth School of BusinessUniversity of ChicagoChicagoUSA

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