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The economics of sustainable development

behavioural economics

Loss aversion and the use of disposable cups

Standard economic theory predicts that people dislike losses more than equivalent-sized gains. Jon Guest investigates whether this could have implications for the usage of disposable coffee cups

Loss aversion in behavioural economics suggests that dislike of losses is far greater than standard theory predicts. This implies that highlighting the loss involved in a decision may lead to bigger changes in behaviour than just emphasising the gain. But how does this relate to disposable coffee cups?

In the UK, consumers purchase around 20 million cups of coffee a week from coffee shops. This creates an environmental issue in the form of disposable coffee cups. These poly-coated cups are difficult to recycle, and in the UK alone we throw away approximately 2.5 billion every year. The majority of these end up in landfill sites.

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The economics of sustainable development