Breaking the Bag Habit: Testing Interventions to Reduce Plastic Bag Demand

In a natural field experiment conducted in a big grocery chain in Armenia, we test the impact of demand-side behavioral (an environmental nudge) and conventional (financial bonus scheme) policies to curb the purchase of single-use plastic bags. We find that both interventions are effective to reduce the demand for single-use plastic bags. Furthermore, the financial bonus scheme is more powerful than the environmental nudge. However, the financial bonus scheme backfires in the sense that it reduces the visits to the grocery chain resulting in less money spent by an average customer unlike the environmental nudge. We also study, whether customers use the reusable bags received for free and how to motivate them to do so. The findings suggest a strong correlation between reusable bag usage and shopping frequency. While many customers use the bag only once, the more frequent the shopping behavior the higher the usage of the reusable bags. Lastly, financial incentives matter for reusable bag usage.