Working Paper: NBER ID: w26725
Authors: Katherine Meckel
Abstract: Quantity vouchers are used in redistributive programs to shield participants from price variation and alter their consumption patterns. However, because participants are insensitive to prices, vendors of program goods are incentivized to price discriminate between program and non-program customers. I study these trade-offs in the context of a reform to reduce price discrimination in the Supplemental Nutrition Program for Women, Infants, and Children (WIC), which provides a quantity voucher for nutritious foods to low-income mothers and children. The reform caused vendors to drop out, reducing program take-up. In addition, smaller vendors increased prices charged to non-WIC shoppers by 6.4%.
Keywords: payment reform; quantity vouchers; WIC; price discrimination; social welfare
JEL Codes: H10; H53; I3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| EBT rollout (I38) | reduction in the number of independent WIC stores (L81) |
| local poverty levels (I32) | likelihood of store exit (J63) |
| EBT rollout (I38) | increase in prices for non-WIC customers for WIC products (J39) |
| EBT rollout (I38) | decrease in WIC participation among pregnant women (I38) |
| local poverty levels (I32) | decrease in WIC participation among pregnant women (I38) |