Why Poor Families Pay More For Everyday Items

In a recent study from the University of Michigan’s Ross School of Business it seems that those that are at the poverty level are paying more for everyday items we all need. The study, which analyzed toilet paper purchases among 100,000 U.S. households over the course of seven years is the source of this data.

Researchers found that low-income families are not able to afford the higher upfront costs associated with buying items in bulk than households with higher incomes. Here’s an example: 36 rolls of two-ply paper might cost about $15, but an individual roll of one-ply paper might cost only $1.

When a family cannot buy in bulk it seriously hurts low-income family’s budget in more ways than just one it was discovered. This is because low-income families can’t afford to stock up, they have to shop more often. So it’s great that there are sales but when you don’t have the ability to buy when you want too, you can’t shop smart. They miss out on sales and special offers. This one example is a good one of what it means to be poor. When the toilet paper runs out, you can’t wait for it to go on sale to buy more. You just have to buy what you can.

The researchers found that low-income households — those making below $20,000 a year — made just 28.3% of their toilet paper purchases on sale, while families making more than $100,000 took advantage of sales nearly 40% of the time.

One way low-income families did try to save on toilet paper was to buy cheaper brands but we all know that sometimes when you buy cheaper brands, you often use more.

The study also looked at the timing of the purchases made by families.

During the first week of each month, when many low-income families had just received their paychecks or monthly food stamps, they were more likely to take advantage of deals and purchase bulk items than during the rest of the month, the researchers found. Households with higher incomes, meanwhile, could afford these discounted goods throughout the month.

While the study only looked at toilet paper purchases, you can see that other things like laundry soap, dish soap, cleaning products and other supplies.

Some are calling this a  “poverty penalty”  and it is one of the biggest problems facing low-income neighborhoods.

Some ways that this could be mitigated is to allow low-income families the opportunity for sales at the beginning of the month or financing options, like a line of credit or payment plans that would allow them to pay weekly.

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