Monday, March 1, 2010

D.C. Bag Fee: Just Make the Decision for Me

I've recently switched jobs, and I noticed a peculiar thing about how two Subway restaurants are dealing with D.C.'s bag fee. Since January 1, District merchants have been required to charge five cents per plastic or paper bag they give to customers, in an effort to keep the bags from ending up in the Anacostia River.

My old Subway, by L'Enfant Plaza, gives customers their sandwiches without the plastic bag (though they are still wrapped in the paper). My new Subway, by McPherson Square, always bags the sandwiches and subtly adds the 5 cents to the bill.

While these approaches are opposites, I prefer either to a third option: being asked each time whether I want a bag and having a tinge of guilt no matter what I decide. While classical economics tells us it's better for consumers to have as many choices as possible, behavioral economics and psychology have increasingly suggested that perhaps we're better off not thinking about certain options (Barry Schwartz's "The Paradox of Choice" deals with this phenomenon in depth).

This has certainly been true for grocery stores; I know more than a few D.C. residents have gone out of their way to shop in the Maryland or Virginia suburbs to avoid the bag tax, even though they could get 20 bags for a dollar and hardly be out any extra money at all.

I've written previously on the D.C. bag fee here and here.