Thursday, June 3, 2010

The Downside of Garbage Bag Taxes

An often touted solution to the problem of too much garbage is charging a tax on each garbage bag picked up by local garbage services. However, according to Levitt and Dubner, authors of the book SuperFreakonomics, this hasn’t worked out very well in some amusing ways.

In addition to creating an incentive to create less garbage, it gives people other incentives:

1. Stuff bags fuller. This has become known as the “Seattle Stomp”.

2. Dump garbage in the woods. This was done in Charlottesville, Virginia.

3. Flush uneaten food down the toilet. “In Germany, trash-tax avoiders flushed so much uneaten food down the toilet that the sewers became infested with rats.”

4. Burn garbage in the back yard. A hospital in Dublin “recorded a near tripling of patients who’d set themselves on fire while burning trash.”

The authors’ main point is that people respond to incentives, but not always in the way we might expect. They study data to try to figure out people’s real behaviour. The book covers many interesting topics. A few are listed below.

When doctors are measured on their patients’ health outcomes, many doctors respond by avoiding taking on very sick patients. This helps their scores, but is bad for the patients who need a doctor the most.

In an experiment to determine how different conditions affect people’s honesty, an honour system of payment for food was set up in a break room. A sign asked for people to place the appropriate amount of money in the “honesty box.” When the price list had a picture of human eyes at the top, people were much more honest. Apparently, we don’t like to cheat when we feel watched.

Which is the more important car safety equipment: seatbelts or air bags? I’m not sure, but according to the authors, seatbelts cost $30,000 for each life saved, and air bags cost $1.8 million for each life saved.

A researcher has a plan that could possibly reverse global warming for less than the amount of money Al Gore’s foundation is spending to raise global warming awareness.

Interesting experiments to try to teach monkeys to use money seemed to lead to monkey prostitution.

I found this book fascinating. The relentless rational search for truth is refreshing. The authors don’t care what people want to be true. They want to know what is actually true. They may not always get it right, but they will change their minds if presented with real evidence.


  1. I listened to an audiobook called "Econopower" that refuted a lot of the research from "Freakonomics", Levitt and Dubner's first book.

    The "Econopower" book really seemed to have a political agenda that was conservative leaning. Thus, for example, where Freakonomics determined that legalized abortion reduced crime when the aborted fetuses would have reached adulthood, Econopower asserted this was untrue.

    These disagreements highlighted for me the complexity of economic study since there are so many factors that determine an end result. Trying to isolate a single factor in a complex environment is extremely difficult, and open to distortion to serve one's own opinions and biases.

    This kind of messy data is less likely in a hard science like physics or in math, a subject you may know a little about. ;-)

  2. @Gene: I'm sure that Levitt and Dubner would be open to rational argument that their conclusions are wrong. But if the criticisms amount to, "we don't want that to be true", it wouldn't be interesting.

    You'd be surprised how often similar disagreements pop up in the hard sciences. Or maybe you wouldn't be surprised.

  3. Actually, the book was called "Freedomonics". I was remembering a different book. There sure are a lot of "economics applied to everyday life" books out there these days.