{"id":2085,"date":"2009-12-22T06:20:44","date_gmt":"2009-12-22T11:20:44","guid":{"rendered":"http:\/\/thesocietypages.org\/thickculture\/?p=2085"},"modified":"2015-09-26T17:18:23","modified_gmt":"2015-09-26T22:18:23","slug":"prospect-theory-policy-torontos-5%c2%a2-plastic-bag-fee","status":"publish","type":"post","link":"https:\/\/thesocietypages.org\/thickculture\/2009\/12\/22\/prospect-theory-policy-torontos-5%c2%a2-plastic-bag-fee\/","title":{"rendered":"Prospect Theory & Policy :: Toronto’s 5\u00a2 Plastic Bag Fee"},"content":{"rendered":"
\"Graphic<\/a>
Graphic from the Torontoist by Brian McLachlan<\/figcaption><\/figure>\n

Notes from North of 49\u00baN<\/em><\/p>\n

Last Friday, the Torontoist listed its 2009 “Heroes & Villains”<\/a><\/strong> and one of the heroes was the mandatory 5\u00a2+ fee for plastic bags<\/a><\/strong> {for all retail} that went into effect on June 1st. \u00a0A columnist for the Toronto Star, Peter Gorrie, called it a sham<\/a><\/strong>, but his arguments are based on a logic that doesn’t account for behavioural change, i.e.,<\/em> a reduction of consumption and use of disposable bags, as people adjust to not using them. \u00a0He made several assumptions::<\/p>\n

    \n
  1. Plastic bags aren’t a major environmental hazard, in terms of garbage load and marine hazards<\/li>\n
  2. Manufacturing plastic bags use fewer resources than paper<\/li>\n
  3. Plastic bags can be re-used by consumers<\/li>\n<\/ol>\n

    He makes the following point, though::<\/p>\n

    “If the nickel fee makes us more aware the bags do have value and carry a slight environmental price tag, fine. If that prods us to consider using less of everything, even better. At most, though, it’s a potent symbol of how we embrace the trivial instead of doing what’s really required.”<\/p><\/blockquote>\n

    I get where he’s coming from, but I don’t think he’s on the right track.<\/p>\n

      \n
    1. Diverting petroleum resources away from disposable bags that wind up in landfills or in the Great Pacific Garbage Patch <\/a> <\/strong>by reducing consumption makes both economic and environmental sense. \u00a0If the policy in aggregate reduces consumption and conserves finite resources, at the expense of convenience, it’s a win in my book.<\/li>\n
    2. This assumes that the policy will not curb demand for disposable bags of all kinds. \u00a0I’m not aware of Toronto retailers shifting to paper.<\/li>\n
    3. While plastic bags can be re-used for other purposes, does the existence of a secondary use warrant unconstrained continued usage? \u00a0This assumes a demand for plastic bags for all purposes that is unyielding.<\/li>\n<\/ol>\n

      More interesting is the quote above, as he wants the public to have more real consciousness about reducing consumption, which is a good thing, but feels the tax embraces the trivial. \u00a0This is where social science comes in.<\/p>\n

      Prospect theory<\/a><\/strong> is part of the field of economic psychology, developed by Daniel Kahneman and Amos Tversky, which serves as a rival theory to the rational expected utility model, which is prevalent in economics. \u00a0Prospect theory is richer and more robust {sounds like a coffee} than expected utility, as it has greater explanatory power. \u00a0A cornerstone of the theory is how people treat gains and losses differently. \u00a0The classic example used is which do you prefer::<\/p>\n