Paying More for Less: Why Don’t Households in Tanzania Take Advantage of Bulk Discounts?

doi:10.1093/wber/lhz020

Publication:
Paying More for Less: Why Don’t Households in Tanzania Take Advantage of Bulk Discounts?

cbnd

Date

2020-01

ISSN

0258-6770 (print)
1564-698X (online)

Published

2020-01

Author(s)

Dillon, Brian

De Weerdt, Joachim

O’Donoghue, Ted

Abstract

Do poor households shop in a way that leaves money on the table? A simple way to maximize consumption, conditional on available cash, is to avoid regularly purchasing small amounts of nonperishable goods when bulk discounts are available at modestly larger quantities. Using two-week transaction diaries covering 48,501 purchases by 1,493 households in Tanzania, this article finds that through bulk purchasing the average household could spend 8.7 percent less without reducing purchasing quantities. Several explanations for this pattern are investigated, and the most likely mechanisms are found to be worries about over-consumption of stocks and avoidance of social taxation. Contrary to prior work, there is little indication that liquidity constraints prevent poorer households in the sample from buying in bulk, possibly because the bulk quantities under examination are not very large.

Citation

“Dillon, Brian; De Weerdt, Joachim; O’Donoghue, Ted. 2020. Paying More for Less: Why Don’t Households in Tanzania Take Advantage of Bulk Discounts?. World Bank Economic Review. © World Bank. http://hdl.handle.net/10986/40288 License: CC BY-NC-ND 3.0 IGO .”

1564-698X

Journal Volume

World Bank Economic Review, Volume 35

Citations

Search for citations in {{source}}
Cited 9 times in (view citations)

Collections

Journal Articles

Full item page

Related items

Showing items related by metadata.

Error: Could not load results for 'https://openknowledge.worldbank.org/server/api/item/relateditemlistconfigs/89d0d206-ee63-4455-9148-10f2521e1ddf_metadata/itemlist'.

Users also downloaded

Showing related downloaded files

Error: Could not load results for 'https://openknowledge.worldbank.org/server/api/item/relateditemlistconfigs/89d0d206-ee63-4455-9148-10f2521e1ddf_downloads/itemlist'.