• EconAfterHours

The Nudge Treatment: Plastic in Colleges

Updated: Mar 10, 2020

By Aarti Malik, Miranda House.

Your favorite milkshake place stops offering plastic straws unless one demands it, and the number of plastic straws and caps falls by 50%. A college canteen stops putting the plastic-straw box on the desk and the number of plastic straws falls by over 90%. Students refuse to have a plastic straw with their beverage which results in the store-owner completely removing them from his store. A “nudge”, as Nobel laureate Richard Thaler defines it, is an aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. And, these are some of the ways a nudge can work in. More interestingly, even India’s Economic Survey 2018-19 mentions the ‘nudge theory’ and how policy nudges have already been working in the nation by citing the examples of Swachh Bharat Mission, and the ‘Give up’ LPG subsidy call.

Nudges On Work In Colleges

But, can the nudge theory really work in fighting against the incredibly high consumption of plastic? Sebastian Ille and two of his colleagues did a study among university students in Pisa over a 60-day span wherein they measured the students’ behavior by the number of plastic cups disposed of in the proper dustbin, observed at the end of each day. Results of the experimental treatments showed that after a combination of nudges was applied, there was a significant improvement in the number of recyclable cups. Another study in a Thai school and one at the Universiti Sains Malaysia showed positive results with some insights into the nudge-theory. In fact, during a conversation with Hemant who runs the Nescafe outlet at Miranda House College, University of Delhi, I got to know of some amazing facts. According to Hemant, last year, roughly 50-60 straws/day would go into the bins from the store. Since then, he has experienced a staggering increase in the number of students asking him to not put a plastic straw and the number of straws going to the bin has drastically fallen down to 5-15 straws a day. Sahil, who runs the juice shop at Miranda House College also reported the fall in demand for plastic straws too. In fact, he admitted that owing to the awareness out of the students refusing to take straws and its harmful effects on the environment, he has decided to completely remove them from his place.

Hemant MH

Mr. Hemant at Nescafe, Miranda House College

Banning or Nudging: Breaking the Dilemma

The classic dilemma of ‘to ban or not to ban’ has now changed to ‘to ban or to nudge’. The belief that bringing nudges into use would not affect economic agents’ economic activity, utility level and their bundle is primarily why someone in authority/power would rather go with altering the relevant people’s behavior than bringing a ban into practice. However, it usually takes time. Mr. X told us that it took over a year for the straws’ consumption to fall from 50-60 to 5-15. Even the other studies mentioned at the starting of the article experimented on people’s behavior for at least 3 months. Hence, when the urgency of a change arrives- it becomes crucial for us to rightly assess the effectiveness of an immediate ban and placing an overtime nudge experiment into place while taking the time cost into account.

MH graph

A significant reduction in the number of straws consumed from the MH outlet or improvement in the number of recyclable cups after a 60-day experiment in Pisa might be impressive, but what if a rule was imposed necessitating the respective environment-friendly behavior in the 2 colleges. Most probably, it would have brought down the number of straws consumed to a zero at Nescafe in MH and a mandatory improvement in the number of recyclable cups in Pisa. Year and months which were spent in the ‘nudge-experiment’ cost in continuous straw-consumption, which fell but was there. Here, a potential ban might sound to be more effective than bringing in a behavior-changing experiment.

What more a ban could possibly do is alter consumers’ utility-driven behavior, which could as well cause a deadweight loss which translates into a fall in consumers’ welfare. Hence, a good analysis of the pros and cons of both the approaches should be done while taking the ‘urgency of the situation’ into account before arriving at a solution. Needless to say, the approach will also differ according to the priority an authority puts on consumers’ satisfaction and environmental protection.

Conclusion

The nudges have worked to reduce plastic consumption. However, the question of nudging or banning to reduce plastic’s demand remains unanswered. Researchers at Chicago Booth write, “Our selective but systematic calculations indicate that the impact of nudges is often greater, on a cost-adjusted basis than that of traditional tools. In light of growing evidence of [nudging’s] relative effectiveness, we believe that policymakers should nudge more.” One might contend that banning plastic would be more effective for reducing its consumption in a particular region, the other might be of the belief that nudging might give the same result over a period of time without leading to any deadweight loss in consumers’ welfare. The major point remains the need to include the urgency of results before deciding on one approach since this is what would make a prime difference.

Till then, let’s keep on trying with nudges to reduce plastic usage until the people in power decide on something, anything.

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