DP12815 How long do healthy habits last? The role of prices

Author(s): Marit Hinnosaar
Publication Date: March 2018
Keyword(s): Consumer behavior, dietary choices, long-term policy effects
JEL(s): D12, I12, I38, L66
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12815

When a policy gives temporary incentives for healthy behaviors, how long does the impact last? I study the U.S. Special Supplemental Nutrition Program for Women, Infants, and Children, which gives vouchers for healthy foods. Using household-level scanner data, I find that the effect of the program diminishes when households become ineligible. Demand model estimates show that price differences between healthy and unhealthy foods play a large role in the decrease of the program's impact. The estimates imply that the program has a persistent effect, in that it increases the impact of subsequent policies like subsidies on healthy foods.