Impulsive Consumption and Financial Wellbeing: Evidence from an Increase in the Availability of Alcohol

Itzhak Ben-David and Marieke Bos

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: Increased availability of temptation goods might harm individuals if they have time-inconsistent preferences and consume more in the present than planned before. We study this idea by examining the credit behavior of low-income households around the expansion of the opening hours of retail liquor stores during a nationwide experiment in Sweden. Consistent with store closures serving as commitment devices, expanded operating hours led to higher alcohol consumption (Nordstrom and Skog 2003) and greater consumer credit uptake and default. Thus, our results show that limiting the availability of temptation goods can improve the financial wellbeing of individuals with inconsistent-time preferences.

JEL-codes: D03 D12 I18 L51 L66 (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-hea
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Impulsive Consumption and Financial Well-Being: Evidence from an Increase in the Availability of Alcohol (2021)
Working Paper: Impulsive Consumption and Financial Wellbeing: Evidence from an Increase in the Availability of Alcohol (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2017-06

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