TY - JOUR
T1 - Banning volume discounts to curb excessive consumption: A cautionary tale
AU - Bokhari, Farasat A. S.
AU - Dobson, Paul W.
AU - Morciano, Marcello
AU - Suhrcke, Marc
N1 - Funding Information: MS is a former member of the Policy Research Unit in Behaviour and Health at the University of Cambridge which was funded by the Department of Health Policy Research Programme (PR-UN-0409-10109).
Acknowledgements: The authors are very grateful to the director of the Policy Research Unit in Behaviour and Health at the University of Cambridge, Professor Theresa Marteau, for allowing us to use the data and to the authors of Nakamura et al. (2014) for making the data available to us. Neither the funders nor the data providers bear any responsibility for the analyses or interpretations presented here.
PY - 2023/7
Y1 - 2023/7
N2 - Volume discounts encourage consumers to buy more. Banning such discounts should then lead to consumers buying less. This is the thinking behind banning multiple-unit discounts, including multibuy price promotions, to curb excessive harmful consumption of alcohol and high-fat, -sugar, and -salt (HFSS) foods. However, our analysis questions the validity of this thinking, which ignores the possible restraining effect of volume discounts. We find that such a ban for retailing alcohol in Scotland increased rather than reduced sales. Retailers switched to using more straight (single-unit) discounts, which encouraged high-consumption households to increase their shopping frequency and buy more.
AB - Volume discounts encourage consumers to buy more. Banning such discounts should then lead to consumers buying less. This is the thinking behind banning multiple-unit discounts, including multibuy price promotions, to curb excessive harmful consumption of alcohol and high-fat, -sugar, and -salt (HFSS) foods. However, our analysis questions the validity of this thinking, which ignores the possible restraining effect of volume discounts. We find that such a ban for retailing alcohol in Scotland increased rather than reduced sales. Retailers switched to using more straight (single-unit) discounts, which encouraged high-consumption households to increase their shopping frequency and buy more.
KW - Alcohol
KW - Excessive consumption
KW - Multibuy
KW - Volume discounts
UR - http://www.scopus.com/inward/record.url?scp=85160765302&partnerID=8YFLogxK
U2 - 10.1016/j.euroecorev.2023.104480
DO - 10.1016/j.euroecorev.2023.104480
M3 - Article
SN - 0014-2921
VL - 156
JO - European Economic Review
JF - European Economic Review
M1 - 104480
ER -