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Interstate Variation in WIC Food Package Costs: The Role of
Food Prices, Caseload Composition, and Cost-Containment Practices
David E. Davis and Ephraim S. Leibtag
Food Assistance and Nutrition Research Report No. (FANRR41)
41 pp, January 2005
The WIC program (formally known as The Special Supplemental
Nutrition Program for Women, Infants, and Children) provides
nutrition education, referrals to health care and other social
services, and foods to supplement diets of low-income pregnant
and postpartum women, and infants and children up to age 5.
WIC is the third largest Federal nutrition assistance program,
trailing only the Food Stamp and the National School Lunch Programs.
WIC, which operates through a Federal/State/local partnership,
is not an entitlement program and the number of participants
that can be served depends on the annual appropriation and the
cost of operating the program. Because food costs are about
75 percent of total program expenditures, containing food costs
is an effective way to reduce program expenditures and extend
service to more eligible people.
What Is the Issue?
Average monthly food costs per participant vary markedly across
continental States, ranging in 2002 from $26.70 in Maine. to
$41.43 in Connecticut. Little is known about the factors that
create interstate cost variation.
At one extreme, the variation may result from differences in
how States contain costs. States frequently enact policies meant
to reduce food costs, such as requiring participants to purchase
milk only in gallon containers. If all interstate food cost
variation were from differing policies, then policies in lowcost
States could provide cost-cutting insights for high-cost States.
At the other extreme, the variation may be caused by factors
that State WIC administrators cannot control (such as food prices
or the proportions of enrollees qualifying for different foods).
In reality, factors both within and outside State control cause
variations in food cost. By studying the associations between
the variables affecting WIC costs that States can actually influence,
it may be possible to lower expenditures (and thus increase
enrollment) in the higher cost States. And understanding these
associations may stop States from enacting policies that will
have little effect on costs and that may, instead, lower participant
satisfaction with the program.
What Did the Study Find?
Variations in food prices across the nation played
the largest role in the differing costs of WIC food packages
from State to State; the differing composition of participants
played a much smaller role.
Food prices for identical items can vary from State to State.
We measured the portion of cost differences resulting from this
price variation and found it to be the most important factor.
Each group of enrollees (women, infants, or children) in the
program qualifies for a different food package. These packages
differ in cost, so variation in overall average food costs can
arise as the mix of enrollees (composition of participants)
differs across States. The portion of food cost differences
resulting from participant composition differences was usually
much smaller than the portion owing to price differences.
Food package costs also vary because savings from identical
cost- containment practices differ across States.
The savings from cost-containment practices depend on two factors:
o The price reduction associated with the practice.
For example, buying one gallon of milk is usually less expensive
than buying two half-gallons.
o Consumer behavior in reaction to the practice.
If WIC households already primarily purchase gallon containers
of milk, then a cost-containment practice requiring them to
buy only gallon containers will not generate much in cost savings.
How Was the Study Conducted?
Because few data exist on the actual foods WIC participants
purchase and the prices they pay, we simulated the purchase
decisions of participants. Information on food prices came from
scanner data of food purchases in supermarkets. Data on the
composition of State caseloads came from USDA's Food and Nutrition
Service. We used Federal WIC regulations to identify the maximum
quantity of food available in each of the different food packages
for WIC participants. This information enabled us to simulate
State-specific average monthly food costs.
The difference between each State's estimated average monthly
food cost and an overall average cost was separated into two
parts: a price effect and a caseload effect. The price effect
represented the portion of a State's cost difference (between
it and the overall average) due to differences in food prices.
The caseload effect represented the portion of the State's cost
difference due to differences in WIC caseload compositions.
We estimated cost savings from cost-containment practices by
simulating unrestricted (i.e., those not subject to any costcontainment
measures) and restricted food packages. Unrestricted packages
were simulated using prices from nearly all types of food items,
while restricted food packages included prices for items allowed
under a specific cost-containment practice. Cost savings from
the cost-containment practice were the difference between the
unrestricted and restricted food packages.
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