Banning volume discounts to curb excessive consumption: A cautionary tale

B-Tier
Journal: European Economic Review
Year: 2023
Volume: 156
Issue: C

Score contribution per author:

0.503 = (α=2.01 / 4 authors) × 1.0x B-tier

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

Abstract

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.

Technical Details

RePEc Handle
repec:eee:eecrev:v:156:y:2023:i:c:s0014292123001095
Journal Field
General
Author Count
4
Added to Database
2026-01-24