NATIONAL BUREAU OF ECONOMIC RESEARCH
Neva K. Novarro
Department of Economics
425 N College Ave.
Claremont, CA 91711
NBER Working Papers and Publications
|January 2012||Do Consumers Exploit Precommitment Opportunities? Evidence from Natural Experiments Involving Liquor Consumption|
with B. Douglas Bernheim, Jonathan Meer: w17762
This paper provides evidence concerning the extent to which consumers of liquor employ commitment devices. One widely recommended commitment strategy is to regulate alcohol consumption by deliberately manipulating availability. The paper assesses the prevalence of the “availability strategy” by evaluating the effects of policies that would influence its effectiveness – specifically, changes in allowable Sunday sales hours. It finds that consumers increase their liquor consumption in response to extended Sunday on-premises sales hours, but not in response to extended off-premises sales hours. The latter finding is inconsistent with widespread use of the availability strategy.