Do Consumers Exploit Precommitment Opportunities? Evidence from Natural Experiments Involving Liquor Consumption
NBER Working Paper No. 17762
This paper provides evidence concerning the extent to which consumers of liquor employ precommitment devices. One widely recommended precommitment strategy is to regulate alcohol consumption by deliberately manipulating availability. We assess the prevalence of the “availability strategy” by assessing the effects of policies that would influence its effectiveness – specifically, changes in allowable Sunday sales hours. We find that consumers increase their liquor consumption in response to extended Sunday on-premise sales hours, but not in response to extended off-premise sales hours. The latter finding is inconsistent with widespread use of the availability strategy.
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This paper was revised on November 1, 2013