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

Author Info

Listed author(s):
  • B. Douglas Bernheim
  • Jonathan Meer
  • Neva K. Novarro

Abstract

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

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File URL: http://www.nber.org/papers/w17762.pdf
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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
Handle: RePEc:nbr:nberwo:17762
Note: PE
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Keywords:

Find related papers by JEL classification:

  • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
  • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
  • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
  • I10 - Health, Education, and Welfare - - Health - - - General

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  1. Xavier Giné & Dean Karlan & Jonathan Zinman, 2010. "Put Your Money Where Your Butt Is: A Commitment Contract for Smoking Cessation," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 213-235, October.
  2. Gharad Bryan & Dean Karlan & Scott Nelson, 2009. "Commitment Contracts," Working Papers 980, Economic Growth Center, Yale University.
  3. Heaton, Paul, 2012. "Sunday liquor laws and crime," Journal of Public Economics, Elsevier, vol. 96(1), pages 42-52.
  4. 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.
  5. Pascaline Dupas & Jonathan Robinson, 2013. "Why Don't the Poor Save More? Evidence from Health Savings Experiments," American Economic Review, American Economic Association, vol. 103(4), pages 1138-1171, June.
  6. Nava Ashraf & Dean Karlan & Wesley Yin, 2006. "Tying Odysseus to the Mast: Evidence From a Commitment Savings Product in the Philippines," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 635-672.
  7. 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.
  8. repec:zur:iewwpx:488 is not listed on IDEAS
  9. Ornstein, Stanley I & Hanssens, Dominique M, 1985. " Alcohol Control Laws and the Consumption of Distilled Spirits and Beer," Journal of Consumer Research, Oxford University Press, vol. 12(2), pages 200-213, September.
  10. Bryan, Gharad & Karlan, Dean & Nelson, Scott, 2009. "Commitment Contracts," Working Papers 73, Yale University, Department of Economics.
  11. 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, vol. 10(1), pages 1-22, August.
  12. Jonathan Gruber & Botond Köszegi, 2001. "Is Addiction "Rational"? Theory and Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1261-1303.
  13. 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, vol. 29(1), pages 62-77, January.
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Cited by:

  1. Christensen, Else Gry Bro & Nafziger, Julia, 2016. "Packaging of sin goods – Commitment or exploitation?," Journal of Economic Behavior & Organization, Elsevier, vol. 122(C), pages 62-74.
  2. Evan Herrnstadt & Ian Parry & Juha Siikamäki, 2015. "Do alcohol taxes in Europe and the US rightly correct for externalities?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(1), pages 73-101, February.
  3. Sung-Jin Cho & John Rust, 2015. "Precommitments for Financial Self-Control:Evidence from Credit Card Borrowing," 2015 Meeting Papers 33, Society for Economic Dynamics.

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