Monday, February 4, 2008

Prices up, use of plastic bags down?

In Ireland - the use of plastic bags decrease a whopping 94% for a plastic bag tax of 33c. New York Times,2 Feb 2008
In Ireland - the use of plastic bags decrease a whopping 95% for a plastic bag tax of 15c. BBC News, 20 August 2002.

How are we doing in South Africa? It seems that we are not that lucky.

A 2007 paper "The Economics of Plastic Bag legislation in South Africa" by Reviva Hasson, Anthony Leiman and Martine Visser argues the folowing:

The results suggest that plastic bag demand is relatively price inelastic and imply that instruments utilising price alone, would have limited efficacy. However, the combination of standards and pricing successfully curbed plastic bag use in the short run. Further analysis suggests that the effectiveness of the legislation may be declining over time.

In plain language: when prices increased, first we did not want them, then we started to get used to it and just paid for them, now we cannot be without them again. The net effect is that state receives a steady flow of income.

Wat happened in Ireland that did not happen here? Social pressure. You do not dare be seen with one of those filthy plastic bags.

I guess South Africans just do not care. The more bags, the more succesfull the shopping.


kaviash said...

This is an interesting observation. But i guess that, the plastic bags in SA are also used for other basic purposes in SA households other than shopping (e.g. for garbage collection. That is why when they go shopping they do not have the already purchased plastic bags for re-use

Note: The black garbage bags are more expensive than the plastic shopping bags. It goes without saying that the most households will accumulate the shopping bags for that purpose :-)

martin de wit said...

Indeed, that might well be the case. The benefit from re-using the bag is higher then the tax we pay on them.

Thank you for the comment.