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“Paper or Plastic?”
In recent years, a significant change has occurred in the way that customers check out at their local grocery stores. Whereas customers used to be asked, “Paper or plastic”, they are now routinely given plastic bags to transport their goods. Although some grocers may still have the paper bag option available, it has to be requested out right by the customer. While this change in baggage options may seem trivial or confusing to the average shopper, an economic analysis of the situation reveals commonsensical explanations through economic principals such as cost-benefit and opportunity cost.
The cost-benefit principle states that an action should only be taken if the benefits outweigh the costs of doing so.Through this principle, as well as the concept of opportunity cost, it is understandable why the grocery stores and their customers might prefer the plastic bags over the traditional paper bags.From the grocery store’s standpoint, the use of plastic bags has several benefits. For one, the plastic bags are cheaper than their paper counterparts. It is fairly obvious that when a firm can cut costs without losing business, they will do so. According to an article by Noel DeKing, paper bag producers have lowered production capacity by almost 40% from 1985 to 1995, a fact that depicts the shift by grocers. As long as there is no major boycottby customers nationwide, this usage of plastic bags can only be expected from the stores.Another aspect is that the physical properties of plastic bags allow them to be more easily stored and accessed. If a grocery store uses the bulkier paper bags, then they have a need for more storage space on or about the counter, which then translates toa larger, more expensive counter. With plastic bags, the counter only needs to have a small dispenser that can hold a sufficient amount of bags. This allows for either a smaller and less expensive counter to be used, or a more effective use of the space that would have been used for bag storage.Additionally, the employee performing the bagging has quicker access to the bags, which leads to shorter lines at the checkout and ultimately translates to a happier customer base and return customers.These points are clear examples of the stores seeing a higher benefit than cost in using the plastic bags instead of the paper, and in turn explain why grocers notopenly offering the paper option.
While the prior explanations clearly illustrate the stores’ preferred use of plastic bags, do they explain the customers’ apparent acceptance of this new non-paper norm? The cost-benefit and opportunity cost principles can also be applied to answer this question. Although the customer does not have any monetary costs or benefits in choosing whether to use paper or plastic, there are other underlying issues that are relevant to the customers’willingness to forego the option of using paper.
One possible explanation could be tied to the various environmental movements that have gained so much popularity over recent years. As a result of these groups’ increasing size, more and more people are being exposed to their messages, which center on issues such as deforestation. With an ever-growing number of people “going green”, it can be assumed that there would be a decline in the use of paper bags due to people believing (though possibly incorrectly) that they have a more harmful impact on the environment than plastic bags. People now appear to be willing to completely forego their traditional paper option of paper bags because they feel that they are doing their part to save the trees and wildlife. While thinking may or may not be sound, it seems that the movements’ messages have played a role in swaying customers’ preferences enough to drop demand for paper bags.
One other possible explanation of the plastic bags’ dominancecould be the fact that they are a more economical way to carry goods. For example, when paper bags were the mainstay a customer would have to make several trips to and from the car once at home, likely carrying one large bulky bag at a time. This waste of time can be seen as an opportunity cost; rather than taking the time to carry all the groceries inside, the person could have already gotten started cooking, or doing something else more efficient than carrying bags. In contrast, plastic bags are much more economical in that you can carry several bags at a time due to plastic’s physical properties and design (i.e. handles). Although you are still carrying the same weight load, the use of plastic bags noticeably cuts the time required to complete the task. This is because you are able to tote multiple bags instead of having to grasp one paper bag from the base. Through this logic, it is evident that the customers’ demand for a more efficient and economical way to carry their goodshas driven the grocery stores to shift their baggage selection to the more desirable plastic option.
Sources:
DeKing, Noel.“Kraft paper: Grocery bag market declines, shipping sacks still growing.”
Pulp & Paper, Nov. 1995. 15 Nov. 2007.