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The Privilege of Buying 36 Rolls of Toilet Paper at Once

Posted By:30/05/2016

The Privilege of Buying 36 Rolls of Toilet Paper at Once

“One of the great ironies in modern America,” writes Mehrsa Baradaran in her 2015 book How the Other Half Banks, “is that the less money you have, the more you pay to use it.” Baradaran, an associate professor at the University of Georgia’s law school, was referring to the outrageously high fees that low-income workers must pay to “fringe” banks just to access and manage the money they’ve earned.

Her point—that when people don’t have much, a single dollar in some ways doesn’t go as far as it otherwise would—extends to several other parts of Americans’ financial lives, including how they shop.

In a recent working paper, the University of Michigan’s A. Yesim Orhun and Mike Palazzolo, point to how two of American shoppers’ (and marketers’) favorite money-saving strategies, the limited-time offer and buying in bulk, come with savings that are more accessible to some consumers than others. Choosing to buy things when they’re on sale or packaged in huge quantities is something lots of shoppers may take for granted as a matter of preference, but for many, these purchases—and the savings that come with them—are out of reach.

To see how often consumers at different income levels take advantage of discounts, Orhun and Palazzolo analyzed seven years’ worth of data on toilet-paper purchases made by over 100,000 American households. They picked toilet paper because it’s “tailor-made” for what they’re interested in studying: It’s often sold in bulk, it’s frequently on sale, and it’s non-perishable and easily storable.

They found that high-income households (those making $100,000 or more a year) bought their toilet paper on sale 39 percent of the time, whereas low-income households (those making $20,000 or less a year) only did so 28 percent of the time. High-income households were also more likely to buy more rolls of toilet paper at a time, which meant not only that they were saving money on each roll, but that they didn’t have to make as many trips to the store. “Low income households,” Orhun and Palazzolo write, “are less likely to utilize these strategies even though they have greater incentives to do so.”

Source: The Atlantic

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