Peer Pressure in Voluntary Environmental Programs: a Case of the Bag Rewards Program

This paper studies stores that voluntarily reward consumers for changing their convenience-oriented, waste-increasing consumption behaviors. We focus on shopping bag rewards programs which encourage consumers to substitute reusable bags for plastic bags. Instead of assuming that consumers have environmental consciousness, we consider the peer pressure of participating in rewards programs among consumers as the driving force increasing the number of consumers behaving in environmentally friendly ways. The results show that rewards programs can be effective in reducing plastic bag users in the long term and can increase profits for the stores implementing them. Unlike former studies suggesting a plastic bag ban or levy to reduce plastic bag use, these findings suggest that the policymakers should support these long-term-effective bag rewards programs by educating consumers about the value of using reusable bags and offering subsidies for stores that implement bag rewards programs.