| Registro completo |
| Provedor de dados: |
AgEcon
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| País: |
United States
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| Título: |
Bidding for WIC infant formula contracts: Do non-WIC customers subsidize WIC customers?
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| Autores: |
Davis, David E.
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| Data: |
2011-04-08
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| Ano: |
2011
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| Palavras-chave: |
Price cost margins
WIC
Oligopoly
Food Assistance
Infant Formula
Auctions
Contracts
Consumer/Household Economics
Health Economics and Policy
Industrial Organization
L11
L113
I18
D12
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| Resumo: |
Although the WIC food assistance program purchases over one-half of all US infant formula, I find the program has little impact on the prices paid by non-WIC customers. I estimate infant-formula marginal cost and find that it is low compared to price, implying large price-cost markups. But, the WIC program is not to blame. Instead large price-cost markups are likely due to customer’s price insensitivity. WIC’s impact on non-WIC customers comes through an increase in sales owing to a WIC “spill-over” effect. The WIC approved brand attains a prominence in the market that makes it a natural choice for non-WIC customers, which makes attaining WIC approval valuable to firms. Firms bid with rebates to attain exclusive WIC approved status which results in significant reductions in the cost of infant formula to the US government.
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| Tipo: |
Working or Discussion Paper
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| Idioma: |
Inglês
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| Identificador: |
http://purl.umn.edu/102457
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| Relação: |
Agricultural and Applied Economics Association>2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania
Selected Paper
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| Formato: |
44
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