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Abstract

USDA’s Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is the Nation’s third-largest food and nutrition assistance program. WIC partici - pants receive Food Instruments they can exchange for foods like infant formula, milk, fruit juice, whole-grain bread, and cold cereal at authorized retail stores. Since partici - pants incur no out-of-pocket costs when purchasing WIC foods, they may be less sensitive to prices when choosing among allowed food items. In this study, we analyze household purchases of cold cereals. Findings show that WIC households buy less costly cereals than non-WIC households, all else constant, when paying out of pocket. Not surprisingly, they purchase with relatively less regard to price when using their WIC benefits, which may increase the program’s food costs. Findings also suggest that some restrictions imposed by WIC State agencies on brands and package sizes may help contain program costs. However, it may also be possible to develop incentives that encourage participants to purchase lower cost products without the negative impact that restrictions may have on participant satisfaction and program participation.

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