NewsNational News

Actions

Why poor families are paying more for everyday items like toilet paper

Posted at 3:44 PM, Mar 25, 2016
and last updated 2016-03-25 15:44:28-04

For low-income families, the discounts shoppers get from buying in bulk are often out of reach — forcing them to pay more for everyday items like toilet paper.

That’s one of the findings of a recent study from the University of Michigan’s Ross School of Business, which analyzed toilet paper purchases among 100,000 U.S. households over the course of seven years.

Researchers found that low-income families were less able to afford the higher upfront cost of buying items in bulk than households with higher incomes. For example, 36 rolls of two-ply paper might cost about $15, but an individual roll of one-ply paper might cost only $1.

The inability to buy in bulk can hurt a low-income family’s budget in more ways than one, researchers found. Because low-income families can’t afford to stock up, they have to shop more often. This means they miss out on sales — when the toilet paper runs out, you can’t wait for it to go on sale to buy more.

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.

The study also looked at the timing of the purchases.

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.

“Our findings suggest it’s not that poor households can’t do the math or are financially inept,” professor Yesim Orhun said in an interview. “They can be frugal. They take the better deal, when they can afford to.”

Orhun and Ph.D. student Mike Palazzolo focused on toilet paper because everyone uses it and it’s hard to go without. Toilet paper is also used at a steady rate, there isn’t a close substitute for it and it’s nonperishable, so households can stock up on it. It’s also an item that’s frequently discounted by stores.

While the study only looked at toilet paper purchases, Orhun points out that most of the items at the grocery store can be stored and bought in bulk. Things like dish soap, laundry detergent, chips, rice and soft drinks are all cheaper in bulk.

Limited access to supermarkets and discount stores, which contributes to the idea that poor people end up paying more for things or the “poverty penalty,” is one of the biggest problems facing low-income neighborhoods.

But the study suggests that low-income families can’t always afford bulk or sale items in the stores that they do have access to.

Low-income families might benefit more from such things as sales at the beginning of the month or financing options, like a line of credit or payment plans. Unlike with TVs or other big ticket items, most stores don’t usually offer financing options for staples such as toilet paper.