Consumer Responses to Incentive to Reduce Plastic Bag Use: Evidence from a Field Experiment in Urban India

In this paper we test for appropriate policies that could help control the use of plastic bags in Delhi. In January 2009, the Government of Delhi introduced a wide-ranging ban on the use of plastic bags in market places. Our results showed a dilution in the efficacy of the ban within a year, with widespread lack of enforcement. About 94% of the consumers continue to use plastic bags in blatant violation of rules. This motivated us to examine the effects of other possible price and non-price instruments possibly requiring less monitoring and enforcement in order to control/reduce the use of plastic bags. We tested the effectiveness of these policies through field experiments in the semi-organized retail sector. The policy treatments included (i) provision of information to consumers, (ii) a cash-back scheme contingent on use of non-plastic bags and (iii) provision of substitutes for plastic bags. The results indicate that cumulatively these interventions increase the proportion of consumers who bring their own bags from 4.6% in the baseline to 17.7% post treatment. The number of consumers who would only use plastic bags came down on average from 80.8% to 57.1%. Hence, our study concludes that in developing countries with little enforcement capacity, a blanket ban may not be the best possible solution. Instead, low cost information interventions, availability of substitutes to plastic bags, and subsidies (taxes) on the use of reusable bags (plastic bags) could constitute an important policy-mix.