TY - JOUR AU - Bernheim,B. Douglas AU - Meer,Jonathan AU - Novarro,Neva K. TI - Do Consumers Exploit Precommitment Opportunities? Evidence from Natural Experiments Involving Liquor Consumption JF - National Bureau of Economic Research Working Paper Series VL - No. 17762 PY - 2012 Y2 - January 2012 UR - http://www.nber.org/papers/w17762 L1 - http://www.nber.org/papers/w17762.pdf N1 - Author contact info: B. Douglas Bernheim Department of Economics Stanford University Stanford, CA 94305-6072 Tel: 650/725-8732 Fax: 650/725-5702 E-Mail: bernheim@stanford.edu Jonathan Meer Department of Economics TAMU 4228 College Station, TX 77843 Tel: 979/845-2059 Fax: 979/847-8757 E-Mail: jmeer@econmail.tamu.edu Neva K. Novarro Department of Economics 425 N College Ave. Claremont, CA 91711 E-Mail: nnovarro@gmail.com AB - The object of this paper is to provide evidence concerning the extent to which consumers of liquor exhibit a demand for precommitment devices. One of the most frequently mentioned strategies for exercising self-control is to limit the availability of a problematic good by not maintaining an easily accessed supply. In a policy regime with shorter sales hours (either for on-premise or off-premise consumption), this strategy should be more effective; hence, if the strategy is widely used, alcohol consumption should be lower. In contrast, without time inconsistency, one would expect liquor consumption to decline with shorter on-premise sales, but not necessarily with shorter off-premise sales hours (because liquor is storable at low cost and the experience is repeated with high frequency). We examine a collection of natural experiments in which states expanded allowable Sunday sales hours for liquor. Our results indicate 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. Thus we find no indication that precommitment strategies affecting availability play meaningful roles in aggregate liquor consumption. Instead, the observed pattern coincides with predictions for time-consistent consumers who have rational expectations and low costs of carrying inventories. ER -