National WIC Association

WIC and the price of infant formula

Reed AJ, Levedahl JW. WIC and the price of infant formula. Am J Agric Econ. 2012;94(3):687-701.

The authors presented an economic model of a national infant formula market. Their research showed that the behavior of paying customers, manufacturers, and retail stores determined the value of local sole-source contracts to manufacturers. In turn,  this value motivated manufacturers to acquire sole-source contracts and make rebate payments that contained the taxpayer cost of providing infant formula to WIC Program participants.