A University of Michigan study finds that low income households aren’t able to take advantage of retail savings at the same rate higher income families can.
The study finds that roughly half of the savings low-income families acquire by buying off-brand products, is wiped out by not having enough money to buy on sale or in bulk.
Yesim Orhun is an Assistant Professor of Marketing at U-M and a co-author of the study.
She says,
“You would imagine that low income households are most likely to [want] to use these promotions, but they’re not able to because basically these promotions require you to pay up front in order to save long term and they don’t have the cash to pay up front.”
For example, Orhun says, low-income households pay 5.5 percent on average more per roll of toilet paper than they would if they had the money to purchase in bulk.
Mike Palazzolo of U-M's Ross School of Business is also a co-author of the study.
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— Amanda LeClaire is an assignment reporter and anchor for 89.1 WEMU News. Contact her at 734.487.1389 or email her aleclair@emich.edu
