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A Little Tweak

March 29, 2010

…and lo, people change their behavior. Check out the startling behavioral changes that a teensy-weensy bag tax has inspired in Washington D.C.

In its first assessment of how the new law is working, the D.C. Office of Tax and Revenue estimates that city food and grocery establishments issued about 3.3 million bags in January, which suggests a remarkable decrease. Prior to the bag tax taking effect Jan 1, the Office of the Chief Financial Officer had estimated that about 22.5 million bags were being issued per month in 2009.

Five cents per bag buys you a reduction from 22.5 million bags/month to 3.3 million bags/month.

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2 comments

  1. For me it’s worked less because of the five cents and more because it forces me to think for a second when the clerk asks “do you need a bag?” I don’t care that saying “yes” will cost me five cents…it’s that I realize I usually don’t need a bag after all. That’s the beauty of the policy, at least as I’ve seen it implemented (if they just gave me the bag and tacked on five cents without asking I doubt I’d notice). I wonder whether making it one cent or making it ten cents would really make much difference.


  2. In many cases, that’s all we need. I’m not sure a gas tax would serve the same purpose, as it’s a considerably lumpier good. (Funny, that it is… but so be it.) Even still, there’s reason to believe that gas is substantially elastic at various price points.



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