Tax and product demand

Loss Aversion and Financial Products
Intervention Charitable Giving

How tax in price tag affect purchase

Intervention Description

Customized solutions

Effective interventions start with a nuanced understanding of the problem. We work with our clients to understand their unique contexts, and then develop bespoke solutions for meaningful behavior change.

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Researchers observed consumer behavior in California stores under two conditions. In one condition, tax was included in the price tag on the product, whereas in the second condition, tax was added on only at checkout. When the price was included in the price tag, consumer demand decreased by 8%, while there was no significant change on consumer behavior when the tax was added at checkout.

Customized solutions

Effective interventions start with a nuanced understanding of the problem. We work with our clients to understand their unique contexts, and then develop bespoke solutions for meaningful behavior change.

Our consulting services Icon arrow right white color

Sources

Chetty et al. (2009), Slience and Taxation: Theory and Evidence, NBER Working Paper.