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SAVE-A-LATTE WITH SUSTAINABILITY: HOW DOES A CHANGE IN PRICING SCHEME IMPACT REUSABLE MUG USE AT COFFEE SHOPS?

by Bolton, Amy

Abstract

Many coffee shops encourage sustainability by offering small discounts to customers who bring reusable mugs, though many consumers do not take advantage of the discount. Would a change in price framing at coffee shops increase the use of reusable mugs? The neoclassical law of demand suggests a same-sized discount and fee would not change behavior. The behavioral economic principle of loss aversion suggests that a fee may be more behavior-changing than a discount. To test these competing theories, a 10-week experiment was run at Colorado College. Before the experiment, customers received a $0.25 drink discount if they brought their own mug. The experiment lowered all drink prices by $0.25 and, if customers needed a disposable cup, they were changed an additional $0.25. The prices in both scenarios are the same, but in the first a disposable cup is included in the price and the second frames buying a disposable cup as an additional cost. Results show the experiment did not impact total drinks sold, but reusable mug distribution and the price change increased reusable mug-bringing by 3.8 and 1.9 percentage points respectively.

Note

The author has given permission for this work to be deposited in the Digital Archive of Colorado College.

Colorado College Honor Code upheld.

Includes bibliographical references.

Administrative Notes

The author has given permission for this work to be deposited in the Digital Archive of Colorado College.

Colorado College Honor Code upheld.

Copyright
Copyright restrictions apply.
Publisher
Colorado College Tutt Library
PID
coccc:30973
Digital Origin
born digital
Extent
23 pages : illustrations
Thesis
Senior Thesis -- Colorado College
Thesis Advisor
May 19 Jessica Hoel
Department/Program
Economics and Business
Degree Name
Bachelor of Arts
Degree Type
bachelor
Degree Grantor
Colorado College Tutt Library
Date Issued
2019-05