Consumers’ Willingness to Pay for Biodegradable Shopping Bags

Abstract

Plastic pollution has become a challenging issue worldwide, causing adverse impacts on the environment and ecosystem. Single-use plastic shopping bags and bottles are the main reasons behind plastic litter. These non-degradable bags create market externalities that can be internalized through different techniques. This study estimates the users’ willingness to pay for biodegradable bags using the contingent valuation method. Data from 360 respondents were collected in a market survey through a designed questionnaire. Three market areas of Peshawar city were selected, which many consumers visit daily. Willingness to pay depends on the demographic and socioeconomic characteristics of the consumers. The Tobit model with marginal analysis yields significant results. The results show that the marginal change in the willingness to pay of an individual decreases with the increase in income. The marginal Willingness to Pay remains the same for respondents of all education categories. There is a downward trend in marginal willingness to pay when the family size of the respondent increases. 38% of the respondents were not using degradable bags. 35 percent strongly agreed on an awareness campaign. The study recommends that there should be a subsidized price on each good quality biodegradable cotton bag in shopping zones.