Banning volume discounts to curb excessive consumption: A cautionary tale

Bokhari, Farasat ORCID:, Dobson, Paul, Morciano, Marcello and Suhrcke, Marc (2023) Banning volume discounts to curb excessive consumption: A cautionary tale. European Economic Review. ISSN 0014-2921

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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.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Economics
Faculty of Social Sciences > Norwich Business School
Depositing User: LivePure Connector
Date Deposited: 16 May 2023 08:31
Last Modified: 02 Jun 2023 14:30
DOI: 10.1016/j.euroecorev.2023.104480

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