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Left-digit pricing effects in a high-resolution examination of hypothetical operant demand for alcohol

Author:
Salzer, Allyson R., Gelino, Brett W., Reed, Derek D.
Source:
Behavioural processes 2019 v.165 pp. 51-57
ISSN:
0376-6357
Subject:
alcohol drinking, alcohols, commodity prices, consumer preferences, demand elasticities, models, products and commodities, resource allocation
Abstract:
Behavioral economic measures have demonstrated marked success in the evaluation of consumer choice. Field-standard operant demand curve analyses provide a valuable model of resource allocation via responses to maintain “free-rate” commodity use or consumption. This demand analysis thereby provides a behavioral complement to consumer science techniques. Despite apparent congruence of operant behavioral economics and consumer science, the left-digit effect represents one area of research predominantly untouched by behavioral economic investigation. Previous efforts have applied the hypothetical purchase task to map the effect of a changing left-digit on subsequent purchase decisions. The current study extends investigation of the phenomenon to responding on the validated Alcohol Purchase Task. Introduction of a high-density price structure revealed evidence of digit sensitivity, wherein demand elasticity was disproportionately affected at and around whole-dollar changes. That responses were influenced by small shifts in pricing implies a possibility for policy-level modulation of alcohol ingestion without need to increase commodity price beyond unit elasticity. Capture of digit preference in a self-report framework speaks to the sensitivity of purchase task methodology to detect small, aberrant changes in consumer product perception. Behavioral economic researchers should consider this extent of sensitivity when interpreting results of hypothetical purchase task investigations.
Agid:
6449810