Cost Implications of Participant Product Selection in USDA’s Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)

USDA’s Special Supplemental Nutrition Program for Women, Infants and Children (WIC) is the third-largest food assistance program in the United States. WIC participants are required to select fixed quantities of WIC-approved foods except for fruits and vegetables, for which they receive a cash-value voucher. Participants may lack an explicit economic incentive to minimize food costs by shopping at low-cost WIC-authorized vendors or selecting less expensive products, brands, or packages of foods. Thus, each WIC State agency faces the challenge of simultaneously controlling program costs and supporting participants’ satisfaction by providing options when they shop for WIC foods. WIC State agencies seek to strike this balance in a multitude of ways. One of the most common cost-containment tools is to require participants to purchase the least expensive brand (LEB) of a WIC-authorized product in some food categories. However, the WIC food packages were last revised in 2009, and little is known about the current cost implications of WIC participants choosing expensive brands, products, and package sizes. This study is the first to estimate the potential cost savings from limiting participant choice through LEB policies. We use administrative data on WIC transactions from California and IRI retail scanner data to estimate these potential cost savings for the most frequently redeemed food instruments and extrapolate the information to the State level for a period of over 2 years. The estimated savings associated with LEB policy implementation in California range from $16.1 million to $30.5 million annually.