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Economic Impact Report of Proposed Expanded polystyrene Ban in Howard County

Intro and Formula
The projected economic impact of an expanded polystyrene ban in Howard County is
approximately 2 million dollars anually. The following paper describes the process by which this
approximation was calculated. 𝑅𝑒𝑣𝑒𝑛𝑒𝑒

Calculation Formula: πΌπ‘šπ‘π‘Žπ‘π‘‘ = π΄π‘›π‘›π‘’π‘Žπ‘™
Γ— % π‘…π‘’π‘ π‘‘π‘Žπ‘’π‘Ÿπ‘Žπ‘›π‘‘π‘  𝑒𝑠𝑖𝑛𝑔 π‘π‘œπ‘™π‘¦π‘ π‘‘π‘¦π‘Ÿπ‘’π‘›π‘’ Γ— π‘ƒπ‘Ÿπ‘–π‘π‘’ π·π‘–π‘“π‘“π‘’π‘Ÿπ‘’π‘›π‘‘π‘–π‘Žπ‘™ 𝐴𝑣𝑔
π‘šπ‘’π‘Žπ‘™ π‘π‘œπ‘ π‘‘

Definitions
The following definitions are necessary to understanding the scope of the economic impact
study, its processes, and parameters. The study defines small businesses as those with fewer
than three locations in Howard County. Recyclable products are defined as those eligible for
curbside recycling according to the Howard County Government. The paper assumes that the
county council would identify all paper foodware products as recyclable for the purposes of the
expanded polystyrene ban, although sometimes they can be made ineligible for recycling by
contamination. The paper defines limited service restaurants as those that provide food and/or
beverages but not table waiting. For example, limited service restaurants include coffee shops
and fast food joints. Full service restaurants are defined as those that provide table waiting for
their customers in addition to food and beverages.

Assumptions
The paper assumes that the ban will not extend to products packaged in expanded polystyrene
containers outside of the county, such as meat products sold in grocery stores.
The paper also makes several key assumptions about current expanded polystyrene foodware
usage in Howard County. It assumes that meals served with expanded polystyrene foodware
use an average of one piece of polystyrene foodware per meal. It also assumes that the average
number of customers served by any given restaurant is independent of whether that restaurant
uses expanded polystyrene foodware. And it assumes that if a restaurant uses expanded
polystyrene foodware, then it serves all customers with expanded polystyrene foodware.1
Finally, it assumes all types of expanded polystyrene foodware products are used with
approximately equal frequency.
Additionally, the paper makes two assumptions regarding miscellaneous expanded polystyrene
usage in Howard County. The paper assumes that the revenue from sales of expanded
polystyrene packing products in Howard County are negligible relative to revenue of meals sold
with expanded polystyrene foodware. And it assumes that there are no expanded polystyrene

1

This assumption likely causes an overestimation of impact because most full-service restaurants that use
expanded polystyrene foodware only use their polystyrene take-out containers. Thus, not all full-service restaurant
customers use the polystyrene foodware as assumed. Many are served simply with reusable metal dinnerware.

production facilities operating in Howard County. If this were the case, the ban could result in a
loss of jobs and businesses.

Survey to Approximate Percentage of Restaurants Using Expanded polystyrene
The economic impact study began with an approximation of the percentage of restaurants in
Howard County that use expanded polystyrene foodware to serve their customers. A
representative of Mary Kay Sigaty’s Office administered a survey to 57 restaurants to make this
approximation. The survey consisted of a list of common foodware materials2 and an β€œOther
Material” option, and it asked the survey participants to check all materials that their
establishments use to serve customers. While administering the survey, the administers sought
to gather data from a geographically, economically, and organizationally varied subset of
Howard County restaurants to ensure that the data would be reflective of the diversity of the
Howard County restaurant industry and that it would not be skewed by the overrepresentation
of any particular type of restaurant. Thus, relatively equal quantities of full service (53%) and
limited service (47%) establishments were surveyed. And relatively equal quantities of small
businesses (49%) and chain restaurants (51%) were surveyed. Additionally, the 57 participants
were located 12 different cities and towns all across Howard County. That being said, Columbia
was grossly overrepresented with 26 participants. The survey was administered on site in the
Columbia Mall and Historic Ellicott City to the restaurants’ managers and cashiers, but on-site
administration proved highly inefficient, necessitating a change to tele-surveying. The telesurvey was administered to the restaurants’ take-out specialists and managers. Of the 57
restaurants surveyed, 29 claimed to use expanded polystyrene foodware to serve customers,
i.e. 51%. Because the participants were economically, organizationally, and geographically
diverse and because they constituted approximately 11% of Howard County restaurants3, the
data can be considered relatively accurate and representative of the larger Howard County
restaurant industry for the purposes of our calculation.

Price Differential Determination
After completing the survey, a price differential between expanded polystyrene products and
compostable/recyclable alternatives was determined. Price indexes and listings on restaurant
supply company websites were used to determine the prices of expanded polystyrene products
and recyclable/compostable alternatives. Prices were provided by Clean It Supplies and The
Webstaurant Store. Both companies are wholesale restaurant supply companies that sell
products in sets of cases in which the price per case is dependent on the number of cases
purchased. Each case contained between 100 and 5,000 units, depending on the specific
product and vendor.

2

The list of common foodware materials consisted of aluminum, molded pulp, paper, paperboard, plastic and
Styrofoam (the colloquial term for expanded polystyrene).
3
According to the Maryland Comptroller and U.S. Bureau of Labor Statistics via the Restaurant Association of
Maryland

The prices per unit of the products were calculated by dividing the prices per case by the units
per case. The prices per unit of the product were recorded for all sizes of purchases on the
wholesale spectrum to account for purchases made by restaurants operating on all economic
scales.
Then for each product category (e.g. white expanded polystyrene cups), all of the unit prices
were averaged to determine a singular unit cost that normalized price differences on the
wholesale cost spectrum. An average unit cost was determined for all of the following
expanded polystyrene product categories: take-out containers, white cups, cups with designs,
and bowls with lids. An average unit cost was also determined for all of the following recyclable
paper products: hinged take-out containers, folded take-out containers, cold beverage cups,
hot beverage cups with sleeves, and bowls with lids. The prices of paper hot beverage cups with
sleeves and paper cold beverage cups were averaged to be compared against the price of
expanded polystyrene cups4. And the prices for paper hinged and folded take-out containers
were averaged to be compared against the expanded polystyrene take-out containers. For each
of the aforementioned comparable categories, the difference between the average expanded
polystyrene unit price and the recyclable paper alternative unit price was calculated. Finally,
these differences were averaged to calculate the average cost differential between an
expanded polystyrene foodware unit and a recyclable paper foodware unit. This difference was
found to be $.0665.5

Final Calculation Process
The Restaurant Association of Maryland stated that Howard County Restaurants collected $528
million of revenue in fiscal year 2014. This figure was calculated by the Restaurant Association
of Maryland using tax data collected by the Maryland Comptroller. In an impact study
performed by Montgomery County’s Department of Economic Development (DED), researchers
determined the average cost of a meal in the United States to be approximately $9. This study
assumes that the DED’s figure is relatively accurate and uses the same figure for average meal
cost. Dividing 2014 restaurant revenue ($528 million) by average cost per meal ($9.00) gives an
approximate number of meals served in Howard County in 2014, which is 58,666,667 meals.
The number of meals served is then multiplied by the percentage of restaurants that use
expanded polystyrene in Howard County (51%) to determine the approximate number of meals
served using expanded polystyrene foodware, which is 29,920,000. Finally, this figure is
multiplied by the average cost differential between an expanded polystyrene foodware unit
and a recyclable paper unit ($.0665) to determine the approximate economic impact, which is
approximately $2 million annually.

4

Expanded polystyrene cups can function as both hot and cold beverage cups
This average price differential assumes that all expanded polystyrene products are used with approximately equal
frequency.
5 𝑅𝑒𝑣𝑒𝑛𝑒𝑒

Calculation Formula: πΌπ‘šπ‘π‘Žπ‘π‘‘ = π΄π‘›π‘›π‘’π‘Žπ‘™
Γ— % π‘…π‘’π‘ π‘‘π‘Žπ‘’π‘Ÿπ‘Žπ‘›π‘‘π‘  𝑒𝑠𝑖𝑛𝑔 π‘π‘œπ‘™π‘¦π‘ π‘‘π‘¦π‘Ÿπ‘’π‘›π‘’ Γ— π‘ƒπ‘Ÿπ‘–π‘π‘’ π·π‘–π‘“π‘“π‘’π‘Ÿπ‘’π‘›π‘‘π‘–π‘Žπ‘™ 𝐴𝑣𝑔
π‘šπ‘’π‘Žπ‘™ π‘π‘œπ‘ π‘‘ πΌπ‘šπ‘π‘Žπ‘π‘‘

=

$528 π‘šπ‘–π‘™π‘™π‘–π‘œπ‘›
Γ— 51% Γ— $. 0665 β‰ˆ $2 π‘šπ‘–π‘™π‘™π‘–π‘œπ‘› π‘Žπ‘›π‘›π‘’π‘Žπ‘™π‘™π‘¦
$9.00