A surprising study revealed that low-income families are unable to afford to save when it comes to buying household supplies like toilet paper.
Families with low incomes pay more for everyday household items such as toilet paper than families with higher incomes. It’s not that low-income families are unaware of how to take advantage of discounts and deals, but their ability to buy in bulk is financially limited. As a result, the shoppers who need to save money the most are forking over more of their paycheck.
The recent study by the University of Michigan’s Ross School of Business examined data on toilet paper purchases by 100,000 U.S. households during a period of seven years, reported CNN Money. Toilet paper was chosen for the study because it is used consistently by almost everyone and is an item that often gets discounted by stores.
What they found was that families who earned less were unlikely to afford the higher upfront cost of purchasing things in bulk at discount stores. Buying in bulk involves a higher upfront price, but the savings will eventually make up for it in the long-term. While a pack of 36 rolls of two-ply toilet paper may cost around $15, buying each individually will cost $1.
The shopping method of buying in bulk helps families save in the long run, so low-income households’ inability to stock up will lead them to visit stores more often. It also hurts low-income families’ budgets since they’re more likely to miss out on sales and are forced to buy more toilet paper whenever it runs out.
Calculations show that households that make under $20,000 a year bought toilet paper on sale 28.3% of the time while families who earned six figures bought the items on sale 40% of the time. Professor Yesim Orhun stated in an interview:
“Our findings suggest it’s not that poor households can’t do the math or are financially inept. They can be frugal. They take the better deal, when they can afford to.”
While the study mainly focused on sales of toilet paper, researchers noted that the same applies to most grocery store items that are offered in bulk including dish soap, laundry detergent, snacks and more. The study sheds light on the issue of poverty. The general theory is that low-income families are struggling because of their lack of access to supermarkets and discount stores.
However, the study reveals that even with access to such stores, families are unable to take advantage of the deals. Instead, a different approach might be to have sales at the beginning of the month when families receive their paychecks.
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