A Survey on the Economic Effects of Los Angeles County’s Plastic Bag Ban
Thursday, August 16, 2012
by Pamela Villarreal and Baruch Feigenbaum
Table of Contents
Grocers and other retailers nationwide pack consumers’ purchases in plastic bags. However, a growing number of jurisdictions — including Los Angeles county, and cities such as Austin and Seattle — have banned the use of thin-film plastic bags. Other local governments, such as the Washington, D.C., city council, have implemented a per-bag tax.
In July 2011, the Los Angeles county bag ban took effect for large grocery and retail stores in some areas of the county. In January 2012, the ban took effect for smaller grocery and convenience stores. The ban did not apply to any stores in incorporated areas of Los Angeles County. This study reports the results of a survey of store managers in both areas conducted by the National Center for Policy Analysis regarding the plastic bag ban.
The purpose of the survey was to determine the effects of the ban on sales and employment at the stores affected by the ban. The study also sought to determine if their consumers changed their shopping behavior by increasing purchases at stores that could still offer plastic bags. The survey found that following full implementation of the ban, sales increased at stores in incorporated cities compared with stores in unincorporated areas. Of these respondents to the survey affected by the ban:
- Over a one-year period (pre- and post-bag ban), 60 percent of stores in incorporated areas reported an increase in sales averaging 9 percent.
- Four-fifths of the stores in the unincorporated areas reported a decrease in sales averaging –5.7 percent.
Examining the overall change in sales of all the stores that responded among the two groups (incorporated versus unincorporated):
- Incorporated stores experienced an increase in sales of 3.4 percent.
- However, unincorporated stores reported a decline in sales of –3.3 percent.
The ban negatively affected employment at stores inside the ban area. While every store inside the ban area was forced to terminate some of its staff, not a single store outside the ban area dismissed any staff. Stores inside the ban area reduced their employment by more than 10 percent. Stores outside the ban area increased their employment by 2.4 percent.
Many stores also began purchasing reusable bags. While 43 percent of stores in the ban area had not purchased reusable bags before, every store purchased these bags after the ban. And nearly half of these stores (48 percent), lost money on reusable bags. Of the stores that lost money, 38 percent expected the losses to stop after 1 month to 3 months, another 38 percent thought the losses would continue indefinitely. In order to stop losing money, 29 percent of stores ceased providing free reusable bags, and another 36 percent increased prices on these bags. Most stores also lost money on paper bags.
The study also examines the economic, environmental and health effects of bag bans and analyses their potential costs and benefits. Plastic bags are better for the environment than reusable or paper bags. For an equivalent amount of groceries, production of paper bags requires three times as much total energy and recovers only 1 percent of that energy through combustion. Paper bags also produce substantially more landfill waste. For an equivalent amount of groceries, single-use plastic bags produce 15.5 pounds of waste while paper bags produce nearly 75 pounds of waste.
Paper bags also produce more greenhouse gases. Plastic bags generate 68 percent fewer greenhouse gases than composted paper bags. Plastic bags consume 71 percent less energy during production than paper bags. Reusable bags may be the worst of all. Such bags need to be used 104 times to be less polluting than plastic bags. However, such bags are used only 52 times on average.
Policymakers’ targeting of plastic bags is unfortunate. Banning or taxing such bags reduces economic activity and increases unemployment. However, plastic bags are less harmful to the environment than either paper or reusable bags. There are no economic or environmental reasons for banning or taxing plastic bags.