Working Paper: NBER ID: w28499
Authors: Tatiana Homonoff; Leesien Kao; Javiera Selman; Christina Seybolt
Abstract: Regulation of goods associated with negative environmental externalities may decrease consumption of the targeted product, but may be ineffective at reducing the externality itself if close substitutes are left unregulated. We find evidence that plastic bag bans, the most common disposable bag regulation in the US, led retailers to circumvent the regulation by providing free thicker plastic bags which are not covered by the ban. In contrast, a regulation change that replaced the ban with a small tax on all disposable bags generated large decreases in disposable bag use and overall environmental costs. Our results suggest that narrowly-defined regulations (like plastic bag bans) may be less effective than policies that target a more comprehensive set of products, even in the case when the policy instrument itself (a tax rather than a ban) is not as strict.
Keywords: disposable bags; plastic bag ban; tax policy; environmental regulation
JEL Codes: H23; H71; Q53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Plastic bag ban (L99) | Disposable bag use (F18) |
| Tax on disposable bags (H23) | Disposable bag use (F18) |
| Plastic bag ban (L99) | Thicker plastic bag use (L65) |
| Tax on disposable bags (H23) | Decrease in disposable bags per trip (D12) |
| Plastic bag ban (L99) | Retailers providing thicker plastic bags (L67) |