Paying more for less: why don’t households in Tanzania take advantage of bulk discounts?

Do poor households shop in a way that leaves money on the table? A simple way to maximize consumption, conditional on available cash, is to avoid regularly purchasing small amounts of non-perishable goods when bulk discounts are available at modestly larger quantities. Using two-week transaction diaries covering 48,501 purchases by 1,493 households in Tanzania, we find that through bulk purchasing the average household could spend 8.7% less without reducing purchasing quantities. We investigate several explanations for this pattern, and nd the most likely mechanisms to be worries about over-consumption of stocks and avoidance of social taxation. Contrary to prior work, we find little indication that liquidity constraints prevent poorer households in the sample from buying in bulk, possibly because the bulk quantities in this context are not very large.

Jaar van publicatie:2021

BOF-keylabel:ja

IOF-keylabel:ja

BOF-publication weight:1

CSS-citation score:2

Auteurs:International

Authors from:Higher Education

Toegankelijkheid:Open