The Rise and Fall of Single-Use Plastic Tax: The Effects on Sales and Prices

Itai Ater, Michal Hodor and Nir Yoseph

No 20209, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the effects of an excise tax on single-use plastic tableware products introduced in Israel in November 2021 and repealed 15 months later. After the introduction of the tax, prices of taxed products increased by 45%, and sales decreased by 24%. After its repeal, prices dropped, and sales increased. Yet, prices were 18% higher and sales 19% lower than pre-tax levels. Our analysis shows that changes in consumption habits can explain 15% of the decrease in post-repeal sales, whereas the higher prices explain the rest. The change in consumption habits is greater among less price-sensitive consumers.

Date: 2025-05
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