The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) is a federal program created with the goal of ensuring access to nutritional food among low-income families. WIC participants receive a monthly voucher for a specified basket of foods, including milk, eggs, etc. The vouchers are redeemable at participating grocery stores (vendors), and vendors report the quantity and shelf price of distributed foods to the government for reimbursement. 

Although WIC participants are insensitive to shelf prices, vendors risk losing other customers if they increase prices. Still, vendors have found a number of ways to effectively price discriminate, opening "WIC-only" stores, offering coupons to non-WIC customers only, and reporting inflated prices to the government. In light of rapidly increasing costs due to these types of behaviors, FNS passed several cost-containment reforms during the mid-2000s.

In this paper, I examine the effects of these reforms on participation among different kinds of vendors in WIC and look for resulting effects on participant access. In particular, I hypothesize that increases in administrative burden and price surveillance cause certain types of stores to drop out, especially those facing higher administrative and food costs. I also hypothesize that increases in surveillance will result in decreases in food prices for WIC foods.

I combine several highly detailed state administrative datasets linking vendors, WIC foods by Universal Product Code (UPC), WIC redemptions, vendor compliance, and WIC participants with detailed data on purchases by UPC across the country from the Nielsen Homescan Consumer Panel. I find the following: (1) small WIC vendors tend to have higher costs and are likely to drop out as a result of cost-containment reforms (2) small vendors are more often concentrated in urban areas, but when small stores in rural areas drop out, participation decreases (3) prices fall following increases in price surveillance.