Since March of 2013, Los Altos has implemented a Reusable Bag Ordinance to try and prohibit the use of disposable bags. The option is simple: either hand over 10 cents for a paper bag or bring your own bag from home. Regardless of the type of business you go to (grocery, retail, restaurant, etc.), this ordinance is supposed to be in effect. In adopting this policy, lawmakers are attempting to reduce litter and the number of bags being sent to landfills.
But is a 10 cent penalty enough to completely change consumer behavior? Or would a 10 cent reward for good behavior be a better incentive? When this experiment was conducted in Montgomery County, the tax incentive was more effective. The use of plastic bags dropped 42% and those who continued to use them at least attempted to use less per shopping trip. On the other hand, shoppers who were offered a 10 cent reward were 82% more likely to keep using plastic bags. This implies that consumers feel more affected by the loss rather than the gain.
Relating this to the Chicago study we looked at in class, I am sure that if Kevin and Urail lost money for getting below a C in any class, they would be more incentivized to keep their grades up. However, since there is no punishment for maintaining their poor grades, they think: why should I really try because what do I have to lose? Of course it would be beneficial to get the $50 bonus, but the program doesn't hurt them if they fail to meet the standards. Similarly, the 10 cent bonus would be nice to shoppers, but it doesn't really matter because nothing has changed - they didn't have to pay for bags before and they still don't.
This study highlights the significance of paying attention to human behavior when creating policies. There are many different ways to frame incentives which may be aiming at the same goal, but produce a different result. Every time I go to the Los Altos Safeway with my mom, she makes sure to grab her bags on the way out of the house - these are bags that I hadn't seen until a couple years ago, or the enactment of the policy. And I would say that most other shoppers there also have their bags sitting in the cart. From observation, this incentive has worked in Los Altos. Los Altos alone, not even counting every other city in the country, is on the way to saving millions of bags if they keep the incentive up.
Sources: https://www.aeaweb.org/research/small-incentives-nudge-disposable-bag-tax
https://www.losaltosca.gov/community/page/los-altos-reusable-bag-ordinance
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The greater impact of feeling economic loss over a gain does show how individuals and policies can be influenced. Negative habits continue because, according to psychological explanations, new behaviors are rarely as motivating as existing ones that have been rewarded (the ease of not having to prepare bags). While small rewards for behavior change may not be as efficient as punishments, policies cannot solely rely on creating losses for those who continue their behaviors.
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ReplyDeleteI think that it's really interesting how reusable bag usage can be incentivized using basic psychology. Humans are hard to change because we are routine creatures. Take a look at how people are handling climate change-- it's hard to get people to reduce their carbon footprint because it is convenient to keep doing things as we always have. However, by adding positive incentives to trivial actions, perhaps we can instigate pervasive social change.
ReplyDeleteBehavioral economics is a really interesting field and is necessary when making decisions such as the tax on plastic bags. The tax on plastic bags works as negative incentive for people not to use plastic bags. It has been shown that negative incentives are more effective than positive incentives.
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