A wicked problem? cost containment in the women, infants and children program

aitone, l. tina; sexton, j.richard and volpe, j. richard;

The Special Supplemental Nutrition Program for Women, Infants and
Children (WIC) Program is a key part of America�s safety net, but its structure fails to incentivize participants to be cost-conscious in their purchases and may cause retailers to attach excessive markups to WIC products. We investigate cost containment in the WIC Program, with a focus on California. Results show that smaller vendors often charge considerably higher prices for WIC foods than their larger
counterparts. However, larger vendors do not mark up WIC foods more or promote them less than comparable control products. Cost containment can be improved by targeting WIC Program sales to larger vendors when it is possible to do so without compromising participant access, and using large-vendor prices as a benchmark to limit prices set by smaller vendors.