Saturday 25 September 2010

Nudge: 50 cents plastic bag levy


I was at the grocery store this morning when it suddenly dawned on me that nudges exist everywhere.

I recently read the book Nudge by Richard Thaler and Cass Sunstein about choice architect and small things in choice systems that may help people make better decision.

A section of the book mentioned about how people hate to lose twice as much as they like to win i.e. people would rather NOT lose $100 than to win $50.

Thus when I was at the grocery store and when I saw how many people are now using environmental bags than plastic bags because of the 50 cents plastic bag levy in Hong Kong, the power of nudge came to mind.

People would rather "go through the trouble to" bring their own bag than to lose 50 cents (an insignificant amount).

This little nudge in the system has drastically reduced the amount of plastic bags distributed by shops by 90%!!!!

You can use nudges in organ donations, saving plans, business plans and many other places to help people make better decisions.

Read this book, I highly recommend it.

If 50 cents can make such a big change in plastic bags usage, imagine what else all other little nudges can do to make our world a better place!