Plastic Bags and Econ 101

| Tue Mar. 30, 2010 4:21 PM EDT

Via Matt Yglesias, WeLoveDC reports on the results of the District's new tax on plastic bags:

The District’s 5-cent bag tax, which started in January 2010, netted approximately $150,000 during its first month of enactment. According to the D.C. Office of Tax and Revenue, only 3 million bags were issued in the month of January compared to 2009’s 22.5 million bags per month average, and it appears that the new law DC shoppers has been successful in altering shopping bag habits faster than was expected.

Impressive! So why has a small charge been so effective? The actual amount of money involved is pretty tiny, after all. Some guesses:

  1. There's excellent substitutability here, since it's easy to reuse plastic bags a few times or switch to infinitely reusable cloth bags.
  2. People respond disproportionately to being charged for things they've been conditioned to think of as free.
  3. Green agitprop has put lots of people right on the knife edge of switching to resusable bags already, so a tiny nudge is all that was needed.
  4. There's a bit of an optical illusion here: Customers are still using plastic bags, but insisting that they be filled to bursting so they use fewer of them.
  5. Something else.
  6. All of the above.

A question for DCers: how does this tax work? That is, how does the cashier know how many bags to charge you for before all your groceries are bagged? Do they have to wait to finish ringing you up to see how many bags the bagger uses? Does that slow things down? Is that another incentive to bring your own bags?

Apropos of my reason #3, it didn't take much to get me to switch. About a year ago my local Gelson's started giving away cloth bags now and again and the checkers always ask if you have them before they start bagging. It was a tiny thing, but it was just enough to put it at the top of my mind and get me to bring my cloth bags with me when I went shopping. Sometimes a nudge is all you need.

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