Habit Formation and the Persistent Impact of WIC
By David Frisvold, University of Iowa
In this project, we will examine the possibility that antipoverty programs that provide highly targeted vouchers for a sustained period could persistently influence behavior after the program ends through the formation of habits. We do this in the context of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), a part of the non-traditional safety net, which provides recipients a set of vouchers for specific food items. Specifically, using detailed scanner data, we will estimate whether the changes in household purchasing patterns that occur during program participation persist after eligibility ends. We will estimate the differences in the purchases of WIC-eligible and WIC-ineligible products among income eligible and income-ineligible households in which the youngest child is age-eligible and age-ineligible. Further, we will examine the robustness of these results to multiple additional empirical strategies using the change in the WIC food packages implemented throughout 2009 and household income volatility over time. The relatively long period during which WIC provides vouchers and the large scale of implementation set this study apart in the literature on incentives and habit formation. Overall, this project represents the first investigation into the potential of public assistance programs to combat the effects of poverty by instilling positive habits in beneficiaries.