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

Itzhak Ben-David and Marieke Bos

No 23211, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: D03 D12 I18 L51 L66 (search for similar items in EconPapers)
Date: 2017-03
New Economics Papers: this item is included in nep-exp
Note: CF EH IO
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Published as Itzhak Ben-David & Marieke Bos & Wei Jiang, 2021. "Impulsive Consumption and Financial Well-Being: Evidence from an Increase in the Availability of Alcohol," Review of Financial Studies, Society for Financial Studies, vol. 34(5), pages 2608-2647.

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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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