IDEAS home Printed from https://ideas.repec.org/a/eee/jeeman/v110y2021ics0095069621000899.html

Modest and incomplete incentives may work: Pricing plastic bags in Uruguay

Author

Listed:
  • Cabrera, José María
  • Caffera, Marcelo
  • Cid, Alejandro

Abstract

We study the impact of voluntary prices on the demand for plastic bags, using two years of administrative data from a national supermarket chain in Uruguay. We find that prices of US$ 0.07 and US$ 0.10 per unit decreased the number of bags used by its customers in the range of 70%–85%. We also find that in anticipation of the price, customers increased the use of bags by up to 38% in some branches before its implementation. This result has strong implications for future studies, regarding the need to use long pre-periods. According to our data, short pre periods could bias upward the estimation of the effect of the prices by up to 41%. Finally, we do not find evidence consistent with the supermarket suffering a loss of sales, due to clients moving to stores not pricing the bags. The fact that the supermarket is a discount chain (clients are more price sensitive) and that it seems to have chosen the cities and towns in which it had more market share to rollout the prices, may inform policy makers about the conditions under which incomplete and moderate incentives may work.

Suggested Citation

  • Cabrera, José María & Caffera, Marcelo & Cid, Alejandro, 2021. "Modest and incomplete incentives may work: Pricing plastic bags in Uruguay," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:jeeman:v:110:y:2021:i:c:s0095069621000899
    DOI: 10.1016/j.jeem.2021.102525
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0095069621000899
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jeem.2021.102525?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
    2. Clément de Chaisemartin & Xavier D'Haultfœuille, 2020. "Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects," American Economic Review, American Economic Association, vol. 110(9), pages 2964-2996, September.
    3. Kirill Borusyak & Xavier Jaravel & Jann Spiess, 2024. "Revisiting Event-Study Designs: Robust and Efficient Estimation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(6), pages 3253-3285.
    4. Dikgang, Johane & Leiman, Anthony & Visser, Martine, 2012. "Analysis of the plastic-bag levy in South Africa," Resources, Conservation & Recycling, Elsevier, vol. 66(C), pages 59-65.
    5. Bueno, Matheus & Valente, Marica, 2019. "The effects of pricing waste generation: A synthetic control approach," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 96, pages 274-285.
    6. Meredith L. Fowlie, 2009. "Incomplete Environmental Regulation, Imperfect Competition, and Emissions Leakage," American Economic Journal: Economic Policy, American Economic Association, vol. 1(2), pages 72-112, August.
    7. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    8. Johane Dikgang & Anthony Leiman & Martine Visser, 2012. "Elasticity of demand, price and time: lessons from South Africa's plastic-bag levy," Applied Economics, Taylor & Francis Journals, vol. 44(26), pages 3339-3342, September.
    9. Armenak Antinyan & Luca Corazzini, 2021. "Take me with you! Economic Incentives, Nudging Interventions and Reusable Shopping Bags: Evidence from a Randomized Controlled Trial," Working Papers 2021:08, Department of Economics, University of Venice "Ca' Foscari".
    10. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    11. He, Haoran, 2012. "Effects of environmental policy on consumption: lessons from the Chinese plastic bag regulation," Environment and Development Economics, Cambridge University Press, vol. 17(4), pages 407-431, August.
    12. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    13. Alberto Abadie, 2021. "Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 391-425, June.
    14. David Roodman & James G. MacKinnon & Morten Ørregaard Nielsen & Matthew D. Webb, 2019. "Fast and wild: Bootstrap inference in Stata using boottest," Stata Journal, StataCorp LLC, vol. 19(1), pages 4-60, March.
    15. Rebecca L. C. Taylor, 2020. "A Mixed Bag: The Hidden Time Costs of Regulating Consumer Behavior," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(2), pages 345-378.
    16. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1133-1165.
    17. Rebecca L. Taylor & Sofia B. Villas-Boas, 2016. "Bans vs. Fees: Disposable Carryout Bag Policies and Bag Usage," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(2), pages 351-372.
    18. Tatiana A. Homonoff, 2018. "Can Small Incentives Have Large Effects? The Impact of Taxes versus Bonuses on Disposable Bag Use," American Economic Journal: Economic Policy, American Economic Association, vol. 10(4), pages 177-210, November.
    19. Alaka Holla & Michael Kremer, 2009. "Lessons from Randomized Evaluations in Education and Health," Working Papers 158, Center for Global Development.
    20. Kristina Shampanier & Nina Mazar & Dan Ariely, 2007. "Zero as a Special Price: The True Value of Free Products," Marketing Science, INFORMS, vol. 26(6), pages 742-757, 11-12.
    21. Abhijit V. Banerjee & Esther Duflo, 2009. "The Experimental Approach to Development Economics," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 151-178, May.
    22. Frank Convery & Simon McDonnell & Susana Ferreira, 2007. "The most popular tax in Europe? Lessons from the Irish plastic bags levy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(1), pages 1-11, September.
    23. Taylor, Rebecca L.C., 2019. "Bag leakage: The effect of disposable carryout bag regulations on unregulated bags," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 254-271.
    24. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    25. Samuel Bowles & Sandra Polania-Reyes, 2012. "Economic Incentives and Social Preferences: Substitutes or Complements?," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 368-425, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alpizar, Francisco & Carlsson, Fredrik & Lanza, Gracia, 2024. "On the perils of environmentally friendly alternatives," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    2. Antinyan, Armenak & Corazzini, Luca, 2025. "Breaking the bag habit: Testing interventions to reduce plastic bag demand," Ecological Economics, Elsevier, vol. 228(C).
    3. Antinyan, Armenak & Corazzini, Luca, 2023. "Breaking the Bag Habit: Testing Interventions to Reduce Plastic Bag Demand in a Developing Country," Cardiff Economics Working Papers E2023/7, Cardiff University, Cardiff Business School, Economics Section.
    4. Ho, Thong Quoc & Nie, Zihan & Alpizar, Francisco & Carlsson, Fredrik & Nam, Pham Khanh, 2022. "Celebrity endorsement in promoting pro-environmental behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 68-86.
    5. Beenish Amir & Saba Fazal Firdousi & Ayesha Afzal, 2025. "Multiplayer Strategic Evolutionary Game Model Analysis on the Ban of Single-use Plastic Bags Under the Pakistan Environmental Protection Act 2019," SAGE Open, , vol. 15(1), pages 21582440251, March.
    6. Antinyan, Armenak & Corazzini, Luca, 2021. "Money does it better! Economic incentives, nudging interventions and reusable shopping bags: Evidence from a natural field experiment," Cardiff Economics Working Papers E2021/29, Cardiff University, Cardiff Business School, Economics Section.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cabrera, José María & Caffera, Marcelo & Cid, Alejandro, 2020. "Small Incentives May Have Large Effects: The Impact of Prices on the Demand for Plastic Bags," MPRA Paper 100178, University Library of Munich, Germany.
    2. Rebecca L. C. Taylor, 2022. "It's in the bag? The effect of plastic carryout bag bans on where and what people purchase to eat," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(5), pages 1563-1584, October.
    3. Tatiana A. Homonoff, 2018. "Can Small Incentives Have Large Effects? The Impact of Taxes versus Bonuses on Disposable Bag Use," American Economic Journal: Economic Policy, American Economic Association, vol. 10(4), pages 177-210, November.
    4. Yu-Kai Huang & Richard T. Woodward, 2022. "Spillover Effects of Grocery Bag Legislation: Evidence of Bag Bans and Bag Fees," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(4), pages 711-741, April.
    5. Tatiana Homonoff & Lee‐Sien Kao & Javiera Selman & Christina Seybolt, 2022. "Skipping the Bag: The Intended and Unintended Consequences of Disposable Bag Regulation," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(1), pages 226-251, January.
    6. Shibashish Mukherjee & Sorin M.S. Krammer, 2024. "When the going gets tough : Board gender diversity in the wake of a major crisis," Post-Print hal-04522722, HAL.
    7. Arne Henningsen & Guy Low & David Wuepper & Tobias Dalhaus & Hugo Storm & Dagim Belay & Stefan Hirsch, 2024. "Estimating Causal Effects with Observational Data: Guidelines for Agricultural and Applied Economists," IFRO Working Paper 2024/03, University of Copenhagen, Department of Food and Resource Economics.
    8. Niklas Potrafke & Luisa Dörr & Klaus Gründler & Tuuli Tähtinen & Luisa Dörr, 2025. "Female Leaders and the Representation of Women in Government," CESifo Working Paper Series 11851, CESifo.
    9. Sungeun Yoon & Lisa House & Zhifeng Gao, 2025. "Environmental policy behavioral spillovers: The impact of California's single‐use carryout bag ban on the use of unregulated single‐use plastics," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 47(1), pages 372-393, March.
    10. Jack (Peiyao) Ma & Andrea Mantovani & Carlo Reggiani & Annette Broocks & Néstor Duch-Brown, 2024. "The Price Effects of Prohibiting Price Parity Clauses: Evidence from International Hotel Groups," Economics Series Working Papers 1043, University of Oxford, Department of Economics.
    11. Di, Wenhua & Pattison, Nathaniel, 2023. "Industry Specialization and Small Business Lending," Journal of Banking & Finance, Elsevier, vol. 149(C).
    12. Alexander Karaivanov & Dongwoo Kim & Shih En Lu & Hitoshi Shigeoka, 2022. "COVID-19 vaccination mandates and vaccine uptake," Nature Human Behaviour, Nature, vol. 6(12), pages 1615-1624, December.
    13. Sunny R. Karim & Morten {O}rregaard Nielsen & James G. MacKinnon & Matthew D. Webb, 2026. "Improved Inference for CSDID Using the Cluster Jackknife," Papers 2602.12043, arXiv.org.
    14. Cardinali, Rebecca & Lusher, Lester & Taylor, Rebecca L.C. & Villas-Boas, Sofia B., 2025. "Does automation reduce stigma? The effect of self-checkout register adoption on purchasing decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 237(C).
    15. Roth, Jonathan & Sant’Anna, Pedro H.C. & Bilinski, Alyssa & Poe, John, 2023. "What’s trending in difference-in-differences? A synthesis of the recent econometrics literature," Journal of Econometrics, Elsevier, vol. 235(2), pages 2218-2244.
    16. Cornelia Chadi, 2022. "Smoking Bans, Leisure Time and Subjective Well-being," Journal of Happiness Studies, Springer, vol. 23(8), pages 3765-3797, December.
    17. Mantovani, Andrea & Reggiani, Carlo & Broocks, Annette & Duch-Brown, Nestor & Ma, Peiyao, 2022. "The Price Effects of Banning Price Parity Clauses in the EU: Evidence from International Hotel Groups," TSE Working Papers 22-1371, Toulouse School of Economics (TSE).
    18. Van Asselt, Joanna & Nian, Yefan & Soh, Moonwon & Morgan, Stephen & Gao, Zhifeng, 2022. "Do plastic warning labels reduce consumers' willingness to pay for plastic egg packaging? – Evidence from a choice experiment," Ecological Economics, Elsevier, vol. 198(C).
    19. Ratzanyel Rinc'on & Kyungchul Song, 2025. "Causal Inference with Groupwise Matching," Papers 2510.26106, arXiv.org, revised Mar 2026.
    20. Edika Quispe-Torreblanca & John Gathergood & George Loewenstein & Neil Stewart, 2025. "Investor Logins and the Disposition Effect," Management Science, INFORMS, vol. 71(1), pages 219-239, January.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:110:y:2021:i:c:s0095069621000899. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622870 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.