The Plastic Poverty Premium: A Market Price Analysis of Small- Format Packaging in Sri Lanka

Abstract

Small-format packaging enables consumers to purchase products with a lower immediate cash outlay, however, the lower transaction price may conceal a higher unit cost and increased packaging intensity. This study examines the economic and environmental implications of small-format packaging in Sri Lanka using 125 market observations across eight consumer product categories. Small and larger package sizes were compared using unit prices, and the Plastic Poverty Premium was calculated as the percentage difference between their unit prices. Package-size ratios and the additional expenditure required to obtain equivalent quantities through small packages were also estimated. A positive Poverty Premium was observed in 75.2% of observations, with a mean of 24.76% and a median of 12.50%. Premiums ranged from −48.81% to 425.00%, indicating substantial variation among products. Beverages recorded the highest category mean premium, whereas snacks showed a negative mean premium. The mean package-size ratio was 7.39, indicating that larger packages generally contained substantially more product than corresponding

small formats. The correlation between package- size ratio and Poverty Premium was very weak (r =

0.008). On average, consumers would incur an additional Rs. 213.06 to obtain equivalent quantities through small packages. Although packaging weight was not measured, purchasing equivalent quantities through multiple small packages increases the number of packaging units entering the post-consumer waste stream. The findings indicate that small-format packages may provide immediate affordability while imposing higher unit costs and potentially increasing packaging intensity. Sustainable packaging strategies should therefore

address affordability, unit pricing and packaging- waste reduction together.