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

39 Pages Posted: 21 Jan 2012 Last revised: 24 Jan 2012

See all articles by B. Douglas Bernheim

B. Douglas Bernheim

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Jonathan Meer

Texas A&M University - Department of Economics

Neva Novarro

Independent

Date Written: January 2012

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.

Suggested Citation

Bernheim, B. Douglas and Meer, Jonathan and Novarro, Neva, Do Consumers Exploit Precommitment Opportunities? Evidence from Natural Experiments Involving Liquor Consumption (January 2012). NBER Working Paper No. w17762. Available at SSRN: https://ssrn.com/abstract=1989334

B. Douglas Bernheim (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
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Stanford, CA 94305-6072
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650-725-8732 (Phone)
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National Bureau of Economic Research (NBER)

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Jonathan Meer

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

Neva Novarro

Independent ( email )

No Address Available
774-287-1093 (Phone)

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