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Do Consumers Exploit Precommitment Opportunities? Evidence from Natural Experiments Involving Liquor Consumption

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  • B. Douglas Bernheim
  • Jonathan Meer
  • Neva K. Novarro

Abstract

This paper provides evidence concerning the extent to which consumers of liquor employ precommitment devices. One widely recommended precommitment strategy is to regulate alcohol consumption by deliberately manipulating availability. We assess the prevalence of the “availability strategy” by assessing the effects of policies that would influence its effectiveness – specifically, changes in allowable Sunday sales hours. We find that consumers increase their liquor consumption in response to extended Sunday on-premise sales hours, but not in response to extended off-premise sales hours. The latter finding is inconsistent with widespread use of the availability strategy.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17762.

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Date of creation: Jan 2012
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Handle: RePEc:nbr:nberwo:17762

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  1. Pascaline Dupas & Jonathan Robinson, 2011. "Why Don't the Poor Save More? Evidence from Health Savings Experiments," NBER Working Papers 17255, National Bureau of Economic Research, Inc.
  2. Gharad Bryan & Dean Karlan & Scott Nelson, 2009. "Commitment Contracts," Working Papers, Economic Growth Center, Yale University 980, Economic Growth Center, Yale University.
  3. Lovenheim, Michael F. & Slemrod, Joel, 2010. "The fatal toll of driving to drink: The effect of minimum legal drinking age evasion on traffic fatalities," Journal of Health Economics, Elsevier, Elsevier, vol. 29(1), pages 62-77, January.
  4. Gine, Xavier & Karlan, Dean & Zinman, Jonathan, 2009. "Put your money where your butt is : a commitment contract for smoking cessation," Policy Research Working Paper Series 4985, The World Bank.
  5. Houser, Daniel & Schunk, Daniel & Winter, Joachim & Xiao, Erte, 2010. "Temptation and Commitment in the Laboratory," Munich Reprints in Economics, University of Munich, Department of Economics 19377, University of Munich, Department of Economics.
  6. Nava Ashaf & Dean Karlan & Wesley Yin, 2004. "Tying odysseus to the mast: Evidence from a commitment savings product in the philippines," Natural Field Experiments, The Field Experiments Website 00206, The Field Experiments Website.
  7. Stehr Mark F, 2010. "The Effect of Sunday Sales of Alcohol on Highway Crash Fatalities," The B.E. Journal of Economic Analysis & Policy, De Gruyter, De Gruyter, vol. 10(1), pages 1-22, August.
  8. Michael F. Lovenheim & Daniel P. Steefel, 2011. "Do blue laws save lives? The effect of Sunday alcohol sales bans on fatal vehicle accidents," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(4), pages 798-820, 09.
  9. Stehr, Mark, 2007. "The Effect of Sunday Sales Bans and Excise Taxes on Drinking and Cross–Border Shopping for Alcoholic Beverages," National Tax Journal, National Tax Association, vol. 60(1), pages 85-105, March.
  10. Heaton, Paul, 2012. "Sunday liquor laws and crime," Journal of Public Economics, Elsevier, Elsevier, vol. 96(1), pages 42-52.
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Cited by:
  1. Julia Nafziger, 2014. "Packaging of Sin Goods - Commitment or Exploitation?," Economics Working Papers, School of Economics and Management, University of Aarhus 2014-05, School of Economics and Management, University of Aarhus.

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