Of Booze and Bags

(Photo: Taber Andrew Bain)

The Austin City Council is about to outlaw the paper and plastic bags you get at the grocery store. Retailers don’t like the ban. One particularly clever argument by liquor retailers is that it will encourage people to buy less — not a good thing, so they argue, when unemployment is high. 

This is a bad argument for so many reasons: 1) Booze demand and bag provision are at most only a tiny bit complementary — one can always carry the six-pack out by hand; 2) To argue that high unemployment is a reason for anything other than macro stimuli is totally self-serving.  I think all universities should hire more economists to reduce unemployment (although others may differ). The best argument against the ban is that it is not efficient—the environmental improvements don’t justify the extra resource cost of schlepping reusable bags into stores.  I don’t find even that argument to be very persuasive.

(HT to TC).


I thought paper bags were required in order to drink booze in public. If so, bags might be much more complementary to cheap booze than non-homeless economists might realize.


This is probably a stupid question, but what bags will the shops be offering instead? Or will customers just have to bring their own?

But yes, I agree it's a dumb argument to say people will buy less in a single shopping session, unless bags and buckets and slings and boxes and anything else you could use to carry shopping were all completely outlawed.

But then, if that were the case, it would possibly encourage more frequent visits to the shops, which could have positive results: People who walk to the shops would get more exercise, people who take public transport would be giving the state more money (Though what the state does with that might not necessarily be positive), people who use private transport would be buying more fuel which is good for the economy (In a limited sense), and old people who need assistance with getting about and making purchases would be providing more work for their carers.

Also, without bags, I imagine people will start wearing large coats for carrying more shopping, which could lead to the hiring of more security staff to prevent shoplifting. Also the wheelbarrow market might flourish in such a dire bagless situation.



I understand the environmental impact that plastic bags have but paper?

The argument is fairly invalid, people won't buy less booze because of a ban on bags.

Enter your name...

Well, in practice, bag bans do reduce sales, at least in the short term, for unplanned transactions.

The scenario works like this: You suddenly decide to stop by the store to get one or two things because you're going right past it anyway. You don't have a cloth bag with you, but this is no big deal, because it's just one or two items, and you can carry one or two items out in your hands. When you're in the store, you're tempted to make an impulse purchase. Why not pick up a few more things since you're already there? Previously, you would have bought the extra items, but now you have to make a decision: Do I buy these extra things and also spend $1 to buy a bag to carry them home in, or do I resist the impulse to buy these extra items now and save the $1?

Many customers decide to save the $1, and some of those sales are permanently lost.

The decision is really no different from "If I stop shopping now, I can use the express checkout lane; if I add one more item, I have to go through the much slower regular lanes."

The businesses most affected by this are the ones with the highest proportion of unplanned visits and impulse purchases. A liquor store is probably more vulnerable to the effect than a grocery store.



As an economist, do you have data on the environmental improvements vs. the extra resource cost? I would think recycling bags would be better than the petroleum costs (both as material and as energy in production) in addition to the environmental damage.

Is carrying a couple nearly weightless bags to the store really a significant extra resource cost?

I thought you lived in Germany for a bit where bringing bags as well as returning beer bottles is a cultural standard and not really a big deal.


"Is carrying a couple nearly weightless bags to the store really a significant extra resource cost?"

That depends on whether you're the sort of person who carefully plans shopping trips, or are (like me) the sort who remembers he needs a few things, and stops at the store on the way to/from other things. I usually do remember to keep a few bags tucked in the car, but not always (and sometimes I have one bag, but buy enough groceries to fill two bags), so every time I didn't I'd waste resources, thereby causing more environmental harm than if I could just get a bag or two in the store.


How would you define "macro stimuli" and has such ever occured? It would seem to me that all stimuli are micro in practice because no stimilus occurs evenly across all industries.

Howard Brazee

We live at a place where our garbage must be in plastic bags. We use grocery bags for that - having a trash can designed for that purpose. When we get low, we must buy other bags that don't fit nearly as well, cost more, and have a bigger impact on the environment. When we have plenty, we use cloth bags.


In West Virginia, "Liquor, wine and beer products that are not already in closed packaging must be bagged before exiting retail locations."


Bans like the one mentioned also fail to account for people who, like me, have their weekly grocery purchases bagged in paper so that I can then reuse the bags for my household trash and recycling.

If I did not have access to this supply of bags, I would be forced to buy plastic trash bags. I may be wrong, but I assume increasing demand for plastic bags is not what the council has in mind.

Based on my experience, I know my bag usage in uncommon. But it's an unintended consequence nonetheless.


Several countries have successfully implemented this technique with little (if any) economic kick-back; Bangladesh and China are two examples. They use simple netting bags or the customer brings their own. After spending some time in Dhaka, I can attest that it has caused neither an increased rate of unemployment nor a sudden decrease in alcoholism.


This already happened in Brownsville, TX but the requirement was that bags couldn't be complimentary. You are still able to purchase the bags at the store. $1 for unlimited plastic or $2 for the recyclable ones.


Any business with 1/4 of a brain will sell bags, the reusable kind sold at every supermarket. This would generate profit and could be a promotional opportunity. It's also possible they could get marketers to give them bags for free.

Liquor stores now have to provide boxes as a service - not required but they need the boxes, ideally with dividers, to get customers to buy more bottles that then need to be carried around.

Ian M

Make people pay for plastic bags. Toronto, Ontario as well as many other cities have made this a bylaw. People buy reusable bags instead. The cost of plastic bags is only $0.05 but people don't want to pay it. Reusable bags range from $1.00 - $2.00. Most people won't bend down to pick up a dime but they still don't want to pay $0.05 for something that used to be free.

Kevin Teljeur

We have a similar system in Ireland. There was a seriously problem with bag litter here, and attaching a levy to the use of bags (admittedly, a peculiar one to enforce and with loopholes) seems to have reduced bag litter significantly. Since bags costs money now, people reuse them (it's a minor cost, the effect is largely psychological).

Paper bags are not levied, however (since they readily biodegrade - I've heard some dissenting arguments on that point for a variety of sound reasons), nor bags that are required for the purchase of the product, such as meat or fruit/vegetables.

There could be a pile of data there to check the effects on, if you were game...

caleb b

My old joke used to be:

Do you know how to tell the difference between a hippie and a hobo in Austin? Hippies have their dogs on leashes.

Now the joke will be: the hobos don't have bags around their beer.

(in case you're dense, the joke is that it is difficult to tell the difference between the hippies and the hobos because there are a lot of dirty, weirdly dressed people walking around Austin)

Texas Retailers

Tell Mayor Leffingwell and the City Council: No Bag Ban for Austin http://www.bagtheban.com/take-action/austin/#.TyFzB7mbJqs.twitter

Mike B

The city is correct to try to deal with the environmental costs associated with bag pollution. The proper action is a tax on bags which pays for the cleanup, etc. Unfortunately the political climate is more favorable to prohibitions than taxes, in part because the public will see that the revenue will probably not go towards bag cleanup, just into the general fund (although one can say even if the bags are cleaned up, society is made indifferent by other services).