Appendix M
Regulatory Impact Analysis Approach
The U.S. Department of Agriculture’s Food and Nutrition Service (USDA-FNS) requested that the committee develop the approach for a regulatory impact analysis (RIA) based on that published by USDA in support of the proposed, interim final rule. The final report will include an RIA conducted according to the approach detailed in the document, “Regulatory Impact Analysis: A Primer” provided by the Office of Information and Regulatory Analysis (OIRA, Circular A-4). In accord with that document, the RIA will include the following elements with the objective to model the impact of changes in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) food packages on program participation, value of food packages as selected, and program cost and administration. Details of the proposed RIA approach are presented here.
- A statement of the need for the regulatory action.
The statement of need for the recommended actions will describe needed changes in WIC food packages based on the current supplemental nutritional needs of the participating WIC population and advances in nutrition science.
- A summary of the consequences of the proposed recommendations.
The RIA will develop a baseline that will describe the WIC program as it currently exists, and forecast how the current program is likely to change in the future. In this case, the baseline will describe current WIC food packages (the same as applied in the sensitivity analysis), calculate the cost of each food package, and forecast
future changes in costs based on expected changes in participation and food prices.
The RIA will also define the appropriate time horizon for analyzing future changes (anticipated to be 5 years).
The RIA will summarize the recommended changes to the current program and describe how the recommended changes translate into changes in each of the WIC food packages, the rationale for each change, and expected (e.g., nutritional) effects.
The RIA will summarize the benefits of the recommended changes. Benefits will be quantified and monetized to the extent possible.
The RIA will demonstrate that recommended changes are projected to be cost neutral when compared to the baseline. Program administrative costs, vendor costs, and market effects will also be considered.
It is anticipated that the largest changes in program costs will come from recommended changes in WIC food packages. The methodology to estimate these costs will use prescription and redemption data (as available) to guide the committee’s assumptions and describe current quantities of foods prescribed to participants. Total food item costs will be derived by multiplying food quantities by food item prices from scanner data. Total food costs will be estimated by multiplying food item costs times the average number of participants purchasing that food item.
The same cost methodology will be applied to the baseline food packages and to the revised food packages. Costs will be forecasted for the appropriate time horizon. Future costs (and benefits) will be discounted to their present value.
The RIA will characterize uncertainties in costs and benefits and evaluate the sensitivity of costs and benefits to potential alternative scenarios.
REFERENCE
OIRA (Office of Information and Regulatory Affairs). 2011. Regulatory impact analysis: A primer. Washington, DC: Office of Management and Budget, The White House. https://www.whitehouse.gov/sites/default/files/omb/inforeg/regpol/circular-a-4_regulatoryimpact-analysis-a-primer.pdf (accessed September 8, 2015).
