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

Brian Dillon, Joachim De Weerdt and Ted O’Donoghue

The World Bank Economic Review, 2021, vol. 35, issue 1, 148-179

Abstract: 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 article 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.

Keywords: bulk discounts; liquidity constraints; social taxes; self-control problems; consumer behavior (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1093/wber/lhz020 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Paying More for Less: Why Don't Households in Tanzania Take Advantage of Bulk Discounts ? (2020)
Working Paper: Paying more for less: why don't households in Tanzania take advantage of bulk discounts? (2017)
Working Paper: Paying more for less: why don't households in Tanzania take advantage of bulk discounts? (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:wbecrv:v:35:y:2021:i:1:p:148-179.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The World Bank Economic Review is currently edited by Eric Edmonds and Nina Pavcnik

More articles in The World Bank Economic Review from World Bank Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().