January 16, 2014

Wall Street Journal Looks at Study of Local Bag Taxes: County’s Results Showed Change in Consumer Behavior

From the WSJ’s “Washington Wire”, reporter David Wessel writes about “Why a Bag Tax Works Better Than a Reusable Bag Bonus.”

Wessel begins, “Government policies, no matter how well-intentioned, often fail to achieve their goals. Practitioners of the rapidly expanding field of behavioral economics, which seeks to better understand why people do what they do, are laboring to change that.”

His article focuses on a September 2013 PhD dissertation by then-Princeton doctoral candidate Tatiana Homonoff that looks at the effectiveness of bag taxes in Montgomery County, the District of Columbia, Arlington, VA and Santa Monica, San Jose, and Santa Cruz County in California.

Homonoff’s work evaluated two policies designed to reduce consumers’ use of disposable grocery bags: “…a five-cent tax on disposable bag use and a five-cent bonus for reusable bag use.” Her research revealed that “the tax decreased disposable bag use by a substantial amount while the bonus generated virtually no effect on behavior….”

Wessel writes about the research, “Before the tax, several stores offered a 5-cent bonus to shoppers who brought their own bags. In stores that offered no incentive, 84% of shoppers took at least one throwaway bag per shopping trip; in stores that offered the nickel lure, 82% did.

“In contrast, some 82% of Montgomery County shoppers used at least one disposable bag per shopping trip before the bag tax was imposed; 40% did afterward. “

Read the entire WSJ “Washington Wire” story.