The impact of taxing plastic bags

In many countries, the movement towards charging for plastic bags appears to be a major annoyance for consumers used to free bags (and double-bagging). In most cases, retailers are forced to charge for the bags, in some few cases, they are taxed on them: Ireland, Denmark, South Africa and Botswana. Yes, Botswana, where retailers are free to pass on the tax to customers, and most do. Botswana also imposed that bags cannot be too thin, which avoids single use and wasteful double-bagging.

Johane Dikgang and Martine Visser study the consequences of these plastic bag taxes in Botswana find a very large response: the number of bags used halved within 18 months, with half of this change happening within the first weeks. Interestingly, the sharpest reduction happened at the bottom end retailers, and also at the top end retailers. While at the bottom a bag became a measurable share of the shopping bill, and hence could easily be saved, that is certainly not the case at the top end, where prices are higher and quantities shopped in a trip a larger. I wonder whether, in the case of high-income households, it was not so much the price of the bag that mattered, but rather that it signaled that bags are bad and one should reduce their consumption.