Plastic Bags and Incentives

People respond to incentives. That’s probably the most powerful lesson a study of economics provides. It appears to be trivially true but it is quite surprising how often that is neglected by policy makers, analysts, and indeed by the average guy on the street.

Fortunately, every so often you do come across happy examples of properly designed incentive mechanisms that elicit the desired (and expected) behavior from the public without the need for authoritarian meddling. An item in reports that a combination of charges and loyalty points have reduced the use of plastic carry bags at some retailers by as much as 85 percent. (Hat tip: Kashyap Patel)
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