Joachim de Weerdt: Paying More For Less. Why don't households in Tanzania take advantage of bulk discounts

Despite average daily per-capita consumption of roughly $1, many Tanzanian households do not take advantage of bulk discounts for staple goods.

Organised by Development Economics

Thu 17 May 2018 12:30 to 13:30

Venue Leeuwenborch, gebouwnummer 201
Room C81
Using two week transaction  diaries covering 48,499 purchases by 1,499 households, we find that through bulk purchasing the average household could spend 9.1% less without reducing purchasing quantities. We investigate several explanations for these patterns, and find the most likely mechanisms to be worries about over-consumption of stocks and avoidance of social taxation. Contrary to prior work, we find little indication that liquidity constraints prevent households from buying in bulk, possibly because the bulk quantities in our context are not very large.