so you think you\'ve got consumer incentives in the bag? think again

by:Sengtor     2020-05-03
People are always terrible when they are out of work.
But sometimes, the fact is that layoffs can represent a victory in public policy.
Last week, a plastic bag maker in Lancashire went bankrupt and lost 40 local jobs.
A manager at Nelson Packaging accused the government of launching a 5 p plastic bag tax in the UK in last October.
If ministers and environmental activists are honest about it, that\'s exactly what they want to happen.
Reduced demand led to a decrease in supply.
This means that, indirectly, fewer people are engaged in the production of plastic bags.
However, from an economic point of view, it is quite strange how sensitive the demand for plastic bags is to this tax.
Or, in economic terms, it proves \"price elasticity \".
When the Chancellor adds pennies to the price of tobacco or alcohol in the budget, we do not see a significant decline in the public\'s consumption of these items.
However, Tesco said the proportion of shoppers using plastic bags has dropped by 80 since the introduction of a 5 p charge five months ago.
This is very consistent with the drop in bag usage in Northern Ireland and Wales when similar taxes were introduced a few years ago.
Consider how often you go shopping at the grocery store.
Let\'s imagine, say, once a week, that you need a large family store with eight new bags.
So this is 40 p.
Imagine that you will never reuse them.
It costs about £ 20 a year.
Every penny is important, especially for families who barely get.
However, this is still not a lot of money in the planning of things.
Many people fail to transfer to different banks at a lower overdraft cost, losing up to £ 200 a year.
People who insist on the same energy supplier have lost a similar amount.
It is likely that some people have changed their behavior on plastic bag tax, but they have not changed banks or energy suppliers, although the potential savings are more than 10 times.
Many people who stop taking new plastic bags will most likely not bend over to pick up the 5 p left on the street.
\"Damn, I forgot to bring my luggage,\" My wife sometimes cries out when we get to the cashier, faced with the prospect of having the assistant pull out some new plastic carriers from the drawer for us.
But she knows that the cost of these new packages will not have an impact on our overall family finances.
What happened?
Psychologists have discovered the \"zero price effect \".
When a project is free (zero)
To 5 p, this may be more noticeable as prices rise from 40 p and 45 p.
Even if the absolute change is the same.
The 5 p levy may be small, but it seems very big in our minds.
This may be related to it.
But there are others.
The use of plastic bags in the UK dropped sharply between 2006 and 2009, of which single bags
Use bags that drop from around 12 billion to 7 billion.
This is mainly due to a surge in public awareness of environmental damage caused by various media reports and campaigns.
This shows that a large proportion of the public has a potential desire to reduce the use of these products.
But usage rebounded to 8.
5 billion after 2009
It is clear that the levy of 5 p broke the dam of inaction and caused a major shift in collective behavior.
5 p may not be financially important, but it\'s a regular tip or push for someone who wasn\'t there before.
Machinery is very important.
People have to choose: Do we want to pack?
Will the big sign above the cashier urge customers to reuse the package (
Or take out the cloth)
Is there the same effect?
It\'s hard to imagine this.
There may also be factors of grazing or even stigma.
If everyone is re-using the package, then society is under the same pressure.
Do you really want to be the only environmental breaker in the store?
In another sense, it\'s not just a matter of money.
Technically, supermarkets can retain the proceeds from taxes and use them to fill in the profits.
But under pressure from the government and shoppers, they promised to donate the cash raised to environmental charities.
Therefore, it is better to consider this as a collective social effort to minimize the overall use of plastic bags.
This is the people who oppose the outrageous act of imposing a \"nanny country\"-or another greedy invisible tax imposed on the long term --
Suffered a loss of population.
It\'s actually pushing a door open.
This is an agreed tax.
As we all know, price changes do affect consumer behavior.
The former Labor government temporarily reduced the VAT rate from 17.
During the 2008 recession, the researchers predicted that overall consumer spending would increase significantly compared to the original situation.
However, human behavior may be much more responsive to price signals than robots do.
Money may even have the opposite effect of what people think.
Consider donating blood.
There is some evidence that the system of turning to the payment of donations to people can lead to a decline in overall numbers.
Many people think that the act of donating blood is selfless and citizen, and it is something that is removed from the market.
Financial transactions that translate them into personal interests may mean that these selfless donors have lost interest.
Fairness is also important.
There was a social science experiment called the ultimatum game in which two people were given a small pot of money.
Then one person is allowed to propose how to allocate the windfall.
If the second person accepts the split, it is distributed as proposed.
But if the second person refuses the offer, there is nothing left.
Logically, the second person should accept any split that means receiving a payment above zero.
Even if the other person gets more, it\'s better to get something instead of nothing.
But in reality, any 50-
The 50-point windfall is often rejected.
It is clear that people would rather not get anything than feel insulted or exploited.
Economic incentives have a great impact on our behavior.
But, as vividly demonstrated by the amazing powerful plastic bag charging, they are by no means the whole story.
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