Broad and narrow bracketing in gift certificate spending
We survey 1050 consumers who have just redeemed one or more open loop gift certificates to learn whether they view gift certificate income, cash gifts and non-gift income as substitutes. We find that the majority (83%) of recipients spend the certificates in the same way as cash. The other respondents (17%) bought an item they would not have bought otherwise but adjustments in their shopping pattern do not seem to result from constraints in redeeming the certificates: 80% of all respondents in this group says they have used the certificate to buy an item they really love to have. While inconsistent with standard microeconomic demand theory, this behavior can be explained by narrow bracketing: in spending gift certificates, these consumers consider a limited choice set of nice, personal items. Our data show that females are more likely to narrow bracket gift certificate income and that positive reciprocity towards the giver induces narrow bracketing in case the giver is a household member who suggests to buy a particular item using the certificate.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joel Waldfogel, 2005. "Does Consumer Irrationality Trump Consumer Sovereignty?," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 691-696, November.
- Richard H. Thaler, 2008.
"Mental Accounting and Consumer Choice,"
INFORMS, vol. 27(1), pages 15-25, 01-02.
- Rabin, Matthew & Weizsäcker, Georg, 2007.
"Narrow Bracketing and Dominated Choices,"
IZA Discussion Papers
3040, Institute for the Study of Labor (IZA).
- Tversky, Amos & Thaler, Richard H, 1990. "Anomalies: Preference Reversals," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 201-211, Spring.
- Daniel Gottlieb & Kent Smetters, 2012. "Narrow Framing and Life Insurance," NBER Working Papers 18601, National Bureau of Economic Research, Inc.
- Nicholas Barberis & Ming Huang & Richard H. Thaler, 2006. "Individual Preferences, Monetary Gambles, and Stock Market Participation: A Case for Narrow Framing," American Economic Review, American Economic Association, vol. 96(4), pages 1069-1090, September.
- Peter Kooreman, 2000. "The Labeling Effect of a Child Benefit System," American Economic Review, American Economic Association, vol. 90(3), pages 571-583, June.
- Jennifer Pate Offenberg, 2007. "Markets: Gift Cards," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 227-238, Spring.
- Waldfogel, Joel, 1993. "The Deadweight Loss of Christmas," American Economic Review, American Economic Association, vol. 83(5), pages 1328-1336, December.
- Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier.
- Waldfogel, Joel, 1998.
"The Deadweight Loss of Christmas: Reply,"
American Economic Review,
American Economic Association, vol. 88(5), pages 1358-1359, December.
- Neeraj Kaushal & Qin Gao, 2009.
"Food Stamp Program and Consumption Choices,"
NBER Working Papers
14988, National Bureau of Economic Research, Inc.
- Solnick, Sara J & Hemenway, David, 1996. "The Deadweight Loss of Christmas: Comment," American Economic Review, American Economic Association, vol. 86(5), pages 1299-1305, December.
- Tim Beatty & Laura Blow & Thomas Crossley & Cormac O'Dea, 2011.
"Cash by any other name? Evidence on labelling from the UK Winter Fuel Payment,"
IFS Working Papers
W11/10, Institute for Fiscal Studies.
- Beatty, Timothy K.M. & Blow, Laura & Crossley, Thomas F. & O'Dea, Cormac, 2014. "Cash by any other name? Evidence on labeling from the UK Winter Fuel Payment," Journal of Public Economics, Elsevier, vol. 118(C), pages 86-96.
- Timothy K.M. Beatty & Laura Blow & Thomas Crossley & Cormac O’Dea, 2012. "Cash by Any Other Name? Evidence on Labelling from the UK Winter Fuel Payment," Koç University-TUSIAD Economic Research Forum Working Papers 1216, Koc University-TUSIAD Economic Research Forum.
- List, John A & Shogren, Jason F, 1998. "The Deadweight Loss of Christmas: Comment," American Economic Review, American Economic Association, vol. 88(5), pages 1350-1355, December.
- Barbara Devaney & Robert Moffitt, 1991. "Dietary Effects of the Food Stamp Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(1), pages 202-211.
- Read, Daniel & Loewenstein, George & Rabin, Matthew, 1999. "Choice Bracketing," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 171-197, December.
- Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2007.
"Consumption Reponses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program,"
0711, Harris School of Public Policy Studies, University of Chicago.
- Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2009. "Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 109-139, October.
- Hilary W. Hoynes & Diane Schanzenbach, 2007. "Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program," NBER Working Papers 13025, National Bureau of Economic Research, Inc.
- Daniela Del Boca & Christopher J. Flinn, 1994.
"Expenditure Decisions of Divorced Mothers and Income Composition,"
Journal of Human Resources,
University of Wisconsin Press, vol. 29(3), pages 742-761.
- del Boca, D. & Flinn, C.J., 1992. "Expenditure Decisions of Divorced Mothers and Income Composition," Working Papers 92-40, C.V. Starr Center for Applied Economics, New York University.
- Webley, P. & Lea, S. E. G. & Portalska, R., 1983. "The unacceptability of money as a gift," Journal of Economic Psychology, Elsevier, vol. 4(3), pages 223-238.
- Moffitt, Robert, 1989. "Estimating the Value of an In-Kind Transfer: The Case of Food Stamps," Econometrica, Econometric Society, vol. 57(2), pages 385-409, March.
- Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, October.
- Heath, Chip & Soll, Jack B, 1996. " Mental Budgeting and Consumer Decisions," Journal of Consumer Research, Oxford University Press, vol. 23(1), pages 40-52, June.
- Daniel Kahneman & Dan Lovallo, 1993. "Timid Choices and Bold Forecasts: A Cognitive Perspective on Risk Taking," Management Science, INFORMS, vol. 39(1), pages 17-31, January.
- Nava Ashraf, 2009. "Spousal Control and Intra-household Decision Making: An Experimental Study in the Philippines," American Economic Review, American Economic Association, vol. 99(4), pages 1245-1277, September.
When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:66:y:2014:i:c:p:284-302. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.