Time inconsistency and alcohol sales restrictions

B-Tier
Journal: European Economic Review
Year: 2016
Volume: 87
Issue: C
Pages: 108-131

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Restrictions on alcohol sales hours or days are commonly used tools in order to reduce alcohol consumption. However, a forward-looking consumer can buy in advance, and thereby mostly undo the impact of the restriction. I study whether time inconsistent consumer preferences can provide a justification for restrictions on alcohol sales time. I estimate a demand model, which allows a fraction of consumers to be time inconsistent, using scanner data of beer purchases and other shopping behavior. According to the estimation results, 16% of regular beer buyers, or only 3% of all consumers, behave as if they are time inconsistent. I find that in terms of consumer welfare, the sales restriction may be welfare improving, but is worse than increasing taxes.

Technical Details

RePEc Handle
repec:eee:eecrev:v:87:y:2016:i:c:p:108-131
Journal Field
General
Author Count
1
Added to Database
2026-02-02