DP13302 Consumer Time Budgets and Grocery Shopping Behavior

Author(s): Bart Bronnenberg, Tobias Klein, Yan Xu
Publication Date: November 2018
Keyword(s): consumer purchase behavior, Household production, retirement, time use
JEL(s): D12, D13, J22, M31
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13302

Home production not only requires money to buy market goods but also varying degrees of time to shop and to prepare consumption goods. Households' time budgets therefore affect their use of the market and the bundle of market goods chosen. Using a novel household panel data set that combines purchase records with time-budget shifting labor-events, and controlling for demographics, this paper shows how the availability of time affects purchasing behavior. We first find that more discretionary time, due to, e.g., retirement, leads to additional shopping trips across a more diverse set of stores, increased spending on groceries, and more diversity in products chosen. In addition, when time is less scarce, restaurant expenditures go down and grocery expenditures go up. We next classify products according to the time it takes to turn them into consumption experiences. Availability of additional time shifts a household's shopping bundle towards more time-intensive market goods. Our results suggest that product- and retail innovations aimed at forward-integrating into household production are important drivers of demand in CPG industries.