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 nonperishable goods when bulk discounts are available at modestl...

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Main Authors:	Dillon, Brian, De Weerdt, Joachim, O'Donoghue, Ted
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	BULK DISCOUNT HOUSEHOLD CONSUMPTION HOUSEHOLD WELFARE LIQUIDITY CONSTRAINT TAX RATE
Online Access:	http://documents.worldbank.org/curated/en/730361582831429968/Paying-More-for-Less-Why-Dont-Households-in-Tanzania-Take-Advantage-of-Bulk-Discounts http://hdl.handle.net/10986/33410

id	okr-10986-33410
recordtype	oai_dc
spelling	okr-10986-334102022-09-20T00:14:02Z Paying More for Less : Why Don't Households in Tanzania Take Advantage of Bulk Discounts? Dillon, Brian De Weerdt, Joachim O'Donoghue, Ted BULK DISCOUNT HOUSEHOLD CONSUMPTION HOUSEHOLD WELFARE LIQUIDITY CONSTRAINT TAX RATE 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 nonperishable 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, this paper finds that through bulk purchasing the average household could spend 8.7 percent less without reducing purchasing quantities. Several explanations for this pattern are investigated, and the most likely mechanisms are found to be worries about over-consumption of stocks and avoidance of social taxation. Contrary to prior work, there is little indication that liquidity constraints prevent poorer households in the sample from buying in bulk, possibly because the bulk quantities under examination are not very large. 2020-03-04T17:01:08Z 2020-03-04T17:01:08Z 2020-02 Working Paper http://documents.worldbank.org/curated/en/730361582831429968/Paying-More-for-Less-Why-Dont-Households-in-Tanzania-Take-Advantage-of-Bulk-Discounts http://hdl.handle.net/10986/33410 English Policy Research Working Paper;No. 9167 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Tanzania
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	BULK DISCOUNT HOUSEHOLD CONSUMPTION HOUSEHOLD WELFARE LIQUIDITY CONSTRAINT TAX RATE
spellingShingle	BULK DISCOUNT HOUSEHOLD CONSUMPTION HOUSEHOLD WELFARE LIQUIDITY CONSTRAINT TAX RATE Dillon, Brian De Weerdt, Joachim O'Donoghue, Ted Paying More for Less : Why Don't Households in Tanzania Take Advantage of Bulk Discounts?
geographic_facet	Africa Tanzania
relation	Policy Research Working Paper;No. 9167
description	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 nonperishable 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, this paper finds that through bulk purchasing the average household could spend 8.7 percent less without reducing purchasing quantities. Several explanations for this pattern are investigated, and the most likely mechanisms are found to be worries about over-consumption of stocks and avoidance of social taxation. Contrary to prior work, there is little indication that liquidity constraints prevent poorer households in the sample from buying in bulk, possibly because the bulk quantities under examination are not very large.
format	Working Paper
author	Dillon, Brian De Weerdt, Joachim O'Donoghue, Ted
author_facet	Dillon, Brian De Weerdt, Joachim O'Donoghue, Ted
author_sort	Dillon, Brian
title	Paying More for Less : Why Don't Households in Tanzania Take Advantage of Bulk Discounts?
title_short	Paying More for Less : Why Don't Households in Tanzania Take Advantage of Bulk Discounts?
title_full	Paying More for Less : Why Don't Households in Tanzania Take Advantage of Bulk Discounts?
title_fullStr	Paying More for Less : Why Don't Households in Tanzania Take Advantage of Bulk Discounts?
title_full_unstemmed	Paying More for Less : Why Don't Households in Tanzania Take Advantage of Bulk Discounts?
title_sort	paying more for less : why don't households in tanzania take advantage of bulk discounts?
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/730361582831429968/Paying-More-for-Less-Why-Dont-Households-in-Tanzania-Take-Advantage-of-Bulk-Discounts http://hdl.handle.net/10986/33410
_version_	1764478702318518272

Paying More for Less : Why Don't Households in Tanzania Take Advantage of Bulk Discounts?

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