Impulsive Consumption and Financial Wellbeing: Evidence from an Increase in the Availability of Alcohol / Itzhak Ben-David, Marieke Bos.

Format:

Book

Author/Creator:

Ben-David, Itzhak.

Contributor:

National Bureau of Economic Research.

Bos, Marieke.

Series:

Working Paper Series (National Bureau of Economic Research) no. w23211.

NBER working paper series no. w23211

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Impulsive Consumption and Financial Wellbeing

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

Increased availability of alcohol may harm individuals if they have present-focused preferences and consume more than initially planned. Using a nationwide experiment in Sweden, we study the credit behavior of low-income households around the expansion of liquor stores' operating hours on Saturdays. Consistent with store closures serving as commitment devices, the policy led to higher credit demand, more default, increased dependence on welfare, and higher crime on Saturdays. The effects are concentrated among the young population due to higher alcohol consumption combined with tight liquidity constraints. The policy's impact on indebtedness is estimated at 4.5 times the expenditure on alcohol.

Notes:

Print version record

March 2017.