Bag 'Leakage': The Effect of Disposable Carryout Bag Regulations on Unregulated Bags

54 Pages Posted: 5 May 2017 Last revised: 21 Dec 2018

See all articles by Rebecca Taylor

Rebecca Taylor

The University of Sydney - School of Economics

Date Written: November 13, 2018

Abstract

Leakage occurs when partial regulation of consumer products results in increased consumption of these products in unregulated domains. This article quantifies plastic leakage from the banning of plastic carryout bags. Using quasi-random policy variation in California, I find the elimination of 40 million pounds of plastic carryout bags is offset by a 12 million pound increase in trash bag purchases—with small, medium, and tall trash bag sales increasing by 120%, 64%, and 6%, respectively. The results further reveal 12-22% of plastic carryout bags were reused as trash bags pre-regulation and show bag bans shift consumers towards fewer but heavier bags. With a substantial proportion of carryout bags already reused in a way that avoided the manufacture and purchase of another plastic bag, policy evaluations that ignore leakage effects overstate the regulation's welfare gains.

Keywords: leakage, plastic, carryout bags, waste, partial regulation, environmental policy, consumer behavior, subtractionality

JEL Classification: Q53, Q58, D12, H23

Suggested Citation

Taylor, Rebecca, Bag 'Leakage': The Effect of Disposable Carryout Bag Regulations on Unregulated Bags (November 13, 2018). Available at SSRN: https://ssrn.com/abstract=2964036 or http://dx.doi.org/10.2139/ssrn.2964036

Rebecca Taylor (Contact Author)

The University of Sydney - School of Economics ( email )

Rm 370 Merewether (H04)
Sydney, NSW 2006
Australia

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