Applying Insights from Behavioral Economics to Supermarket Policies to Reduce Plastic Consumption in India

Abstract

This paper applies knowledge from behavioral economics to the ecofriendly goal of reducing plastic consumption in India. It does so by zooming into one of the roots of the problem: the consumption of plastic bags in supermarkets. The paper designs three supermarket policies that aim to reduce plastic bag consumption by incentivizing consumption of its eco-friendly substitute: paper products. The policies discussed in this paper are all derived from knowledge of three of the most prevalent psychological heuristics, namely, the endowment effect, the status-quo bias, and the availability bias. The discussions will explain the bias involved, the connection between each policy and its corresponding bias, and an evaluation of each policy’s advantages and disadvantages.