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Paying More for Less : Why Don't Households in Tanzania Take Advantage of Bulk Discounts? / Dillon, Brian.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Dillon, Brian.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Bulk Discount.
- Consumption.
- Household Consumption.
- Household Welfare.
- Liquidity Constraint.
- Living Standards.
- Macroeconomics and Economic Growth.
- Poverty Reduction.
- Tax Rate.
- Taxation and Subsidies.
- Local Subjects:
- Bulk Discount.
- Consumption.
- Household Consumption.
- Household Welfare.
- Liquidity Constraint.
- Living Standards.
- Macroeconomics and Economic Growth.
- Poverty Reduction.
- Tax Rate.
- Taxation and Subsidies.
- Physical Description:
- 1 online resource (72 pages)
- Other Title:
- Paying More for Less
- Place of Publication:
- Washington, D.C. : The World Bank, 2020.
- System Details:
- data file
- Summary:
- 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.
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