The First of the Month Effect: Consumer Behavior and Store Responses
AbstractPrevious research has demonstrated that benefit recipients decrease expenditures on, and consumption of, food throughout the benefit month. Using detailed grocery store scanner data, we ask two questions: whether cycling is due to a desire for variety that leads to within-month substitution across product quality, and whether cycling is driven by countercyclical retail pricing. We find that the decrease in food expenditures is largely driven by reductions in quantity, not quality, and that prices for foods purchased by benefit households vary pro-cyclically with demand, implying that households could save money by delaying their food purchases until later in the month. (JEL D12, I38)
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Journal: Economic Policy.
Volume (Year): 2 (2010)
Issue (Month): 2 (May)
Other versions of this item:
- Justine S. Hastings & Ebonya L. Washington, 2008. "The First of the Month Effect: Consumer Behavior and Store Responses," NBER Working Papers 14578, National Bureau of Economic Research, Inc.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
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