Issue: In an effort to ensure the best use of available funds

and to provide benefits to all eligible individuals, State

agencies responsible for carrying out the Special Supplemental Nutrition Program for Women, Infants, and Children

(WIC) have implemented one or more cost-containment

practices. Do these practices adversely affect WIC participants’ food consumption, access to authorized food stores,

program participation, and related factors to the extent that

overall nutrition and health goals are undermined?

Background: Current cost-containment practices are

designed to reduce the average food cost per WIC participant, by limiting access to food vendors (such as supermarkets and grocery stores) to outlets with lower food

prices; limiting food-item selection according to brand,

package size, form, or price; and mandating the use of certain brands in exchange for rebates from food manufacturers or suppliers. Despite potential food cost savings, some

are questioning whether cost-containment practices may

reduce WIC participants’ satisfaction and their program

participation, thereby countering overall goals of supplementing diets with nutritious foods.

At the request of Congress, the Economic Research Service (ERS) initiated a study to assess the impact of WIC

cost-containment practices used by States to reduce food

costs. Manufacturers’ rebates of infant formula, the program’s primary cost-saving source, totaling $1.5 billion in

fiscal year 2001, was excluded from the authorizing legislation. After a detailed State-by-State review of WIC costcontainment practices, six States were selected for case

studies: California, Connecticut, North Carolina, Ohio,

Oklahoma, and Texas. These States represent the range of

cost-containment practices being used, including those that

had practices thought to be restrictive enough to have

measurable outcomes. During 2000-2002, information was

gathered from a number of sources, including surveys of

WIC participants, authorized stores, and individual State

agencies. In the analysis, States with specific ongoing

practices (restricted States) are compared with outcomes in

States without those practices (unrestricted States).

Findings: Three major findings resulted from the ERS study.

Food cost savings were often substantial

Average food package costs, excluding the cost of infant

formula, varied from a low of $24.26 per participant

month (PPM) in Oklahoma to a high of $35.72 PPM in

California (fig. 1). The largest contributors to average food

package costs in the six States were milk, juice, cereal,

and cheese. Cost-containment practices led to estimated

savings as high as $6.43 PPM in Oklahoma and $7.33

PPM in Texas. The large savings in Oklahoma and Texas

were due primarily to food-item restrictions on juice and

United States

Department of

Agriculture

Economic 

Research

Service

Assessment of WIC CostContainment Practices

Food Assistance Research Brief

Phillip R. Kaufman, pkaufman@ers.usda.gov, (202) 694-5376

Food Assistance and Nutrition Research Report Number 34-1 July 2003

WIC School

meals

CACPF General

Figure 1. Average food cost savings1 

$ per participant per month

-1

 0

 1

 2

 3

 4

 5

 6 

 7

CA CT NC OH OK TX

 8

Legumes

Infant juice

Juice

Infant cereal

Cereal

Cheese

Eggs

Milk

1In both Connecticut (CT) and North Carolina (NC), prescribing singlestrength juice for infants instead of infant juice led to increased costs, which 

show as negative savings. For those two States, the height of the total 

savings column in the figure must be reduced by the negative savings 

amount to calculate an estimate of net savings.

Sources: Survey of Food Prices and Item Availability, State administrative 

data on food packages, and interviews with State officials.
2 Economic Research Service / USDA

Assessment of WIC Cost Containment Practices / FANRR-34-1

cereal. In California and Texas, the States with the largest

WIC caseloads, estimated annual savings from cost-containment practices in 2001 were nearly $40 million and

$66 million, respectively. Even in Oklahoma, a State with

a relatively small WIC caseload, estimated annual savings

were $6.7 million in 2001.

There were few adverse outcomes for WIC participants

Most WIC participants surveyed for the study indicated

they were “very satisfied” with the food brands and package sizes allowed on their State’s list of approved foods,

with some exceptions (only about 50 percent were very

satisfied with the cereal brands allowed). Differences in

satisfaction levels between States with and without restrictions were small and statistically insignificant. There was

little evidence that food-item restrictions caused participants to buy less food, and the purchased food in States

with restrictions were usually just as likely to be eaten as

food purchased in States without food-item restrictions

(fig. 2). 

Administrative costs of cost-containment practices

were low

Although difficult to measure precisely, the cost-containment practices implemented by the case study States were

relatively inexpensive to operate. Annual costs per participant ranged from $0.14 in Oklahoma to $1.03 in Connecticut. The six-State average annual cost was $0.58 per

participant. These additional administrative costs are negligible compared with annual food cost savings. The estimated costs, when measured against States’ estimated food

cost savings, averaged about 1.5 percent for the four States

with restrictive practices. These estimates may understate

or overstate actual costs somewhat because the States

could not always provide uniform and complete information needed to estimate costs for specific cost-containment

activities. 

Summary: The cost-containment practices implemented

by the six case-study States reduced food-package costs,

had few adverse impacts on WIC participants, and were

relatively inexpensive to manage and operate. This study

provides strong evidence that cost-containment practices

can be effective without jeopardizing WIC program goals.

In carrying out this study, it became evident that the success of cost containment in the case study States was the

result of ongoing efforts by these States to find those

restrictions that both reduced food package costs and were

acceptable to participants. For instance, all six States collected price information on a regular basis and obtained

feedback from local WIC offices on participant comments

on allowed foods. Selecting and managing appropriate

cost-containment practices is therefore a dynamic process,

requiring ongoing attention to local food markets (especially price and availability of approved food items) and

participant preferences.

Information Sources:

Kirlin, John A., Nancy Cole, and Christopher Logan, Assessment

of WIC Cost-Containment Practices: Final Report, Economic

Research Service, Washington, DC. 20036.

http://www.ers.usda.gov/publications/fanrr31/

http://www.ers.usda.gov/publications/efan03005/

http://www.ers.usda.gov/Briefing/ProgramOutcomes/

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, sex,

religion, age, disability, political beliefs, sexual orientation, or marital or family status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA’s TARGET

Center at (202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, Room 326-W, Whitten Building, 14th and Independence Avenue,

SW, Washington, DC 20250-9410, or call (202) 720-5964 (voice and TDD). USDA is an equal opportunity provider and employer.

Figure 2. WIC families consuming"all" prescribed food1

Percent of WIC families

1Significant differences between restricted and nonrestricted States exist for milk, eggs, infant cereal, and dried beans/peas.

Source: ERS Survey of WIC participants, 2001.

75

80

85

90

95

100

Restricted States Nonrestricted States

Milk Cheese Cereal Infant cereal Juice Peanut butter Eggs Dried beans/peas