Monday, September 14, 2009

Plastic Bags

This week’s topic on incentives got me thinking about plastic bags…that’s right plastic bags.

The Fairbanks Borough has just passed a new law that would tax individuals 5 cents for not bringing their reusable bags when making purchases at larger stores in Fairbanks (Fred Myer, Wal-Mart, Safeway etc.). The revenue then generated would then fund what scant recycling programs we have in Fairbanks. Most of Fairbanks’s major retail outlets object to this policy and state that they already promote reusable bags to their customers. I’m not going to rant on how I am "for” or “against” this tax. I’m just shifting attention towards it because A.) It’s interesting B.) It will be an interesting opportunity to monitor the public’s and retailer’s incentives and possible reactions.

How will people react? This is definitely something I want to track. I was talking to my boss about this new bag tax and he said that he thought it was a good thing. In is family his wife usually remembers to bring their reusable bags to the store, but he forgets. He said “Now I’ll remember to take the reusable bags with me.” On the flip side of the coin, 5 cents now days is a really insignificant amount in comparison to the total cost of groceries most people may not even notice or care about the charge. Also since it’s a flat tax of 5 cents the more stuff you buy and the more bags you use the cheaper your cost is (So the kings and queens of cheapness the economists will use 3x as many bags JK).

America is WEIRD!

When I went to Norway you had to pay for your plastic bags quite a lot actually ($1-3 USD). Most places in Europe this bag thing is the same and oh my gosh there’s more you have to pay for things like napkins and ketchup packets. When I talk about this with Americans they say this make’s them feel ripped off. You see in America we don’t like to “pay extra” for things. We what the most bang for our buck (we like are fries supervised thank you very much). I’m not saying that people in other countries don’t want to find the best deals. I’m just trying to point out a cultural difference. For example: for restaurants in Korea it’s considered ultimate customer service; if you give women smaller portions than men because it means the person making the food was thinking about your needs. If this were to occur in America the ladies would probably be just a bit angry (“I paid the same amount as him; Why don’t I have as much food?!”) I think American’s are focused on obtaining goods and services on a monetary level of "How can I get the most?" We don’t think of TANSTAAFL we think that yes, we can get it free (when everything has a cost). We do pay for these things though, when we go to the College Coffee House the internet is not free, and the price of the purchase you made reflects these things. Every thing has a cost and costs are I’d say the main factor that determines incentives.

It is interesting how Whitman simply states that the slavery problem was induced by a focus on freeing people bound in Slavery and not on the capture of more slaves. When there are loop holes in the system people find them, as mentioned in Robert’s when he talked about how bread producers in Chile decided to shrink a loafs of bread to get a price closer to market price. Could there be such problems from this new bag tax?...this something to think about.


  1. It'll be interesting to see if the "stick" approach will end up being more effective than the "carrot". If memory serves some retailers like Fred Meyer's had already been offering a five cent discount when customers brought their own cloth bags. Will a five cent tax induce more people to switch to cloth than the five cent credit did?

  2. I'm guessing that most people don't know about the bag tax. I'm also guessing that the majority of those that do know about it don't care. BUT WATCH OUT! It's almost guaranteed that the next time I go shopping I'll pick the wrong line and be behind the Large Angry Woman With the Three Screaming Children (LAWWTSC). The first time she finds about this bag tax will be when she accidently reads the last few lines of the receipt, but before she clears the lane. The predictive power of the Law Of Unintended Consequences has given me good reason to believe that the LAWWTSC will then turn her attention to the cashier and start to scream about the 25 cents extra she's been charged.

    This is the point of the shopping experience where I normally check the exits to see if I can just run out of the store and head over to the other Fred Meyers without being tackled by Paul Blart or if I have to stand in the lane and listen to the LAWWTSC vent her spleen about commies, Obama, the Devil and Armageddon.

    The Law of Unintended Consequences and I both predict that the bag tax will get people to change their behavior. They won't change by bringing their own bags, but they will change by spending a few extra minutes every shopping trip yelling at the cashier.

    May Gosh help us all...