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Managing Municipal Solid Waste with Unit-Based Pricing: Policy Effects and Responsiveness to Pricing

Author

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  • Ju-Chin Huang,
  • John M. Halstead,
  • Shanna B. Saunders

Abstract

Many municipalities across the United States have turned to unit based pricing—also known as pay as you throw (PAYT)—as a vehicle for reducing municipal solid waste generation, increasing recycling, and promoting equity in paying for the service. In this paper, we reevaluate the standard analytical methods used to examine the impact of PAYT in the literature and illustrate that econometric shortcomings may have led to underestimation of policy effects. A two-tier analytical approach to examining PAYT program effects is proposed and is demonstrated in a case study of New Hampshire municipalities.

Suggested Citation

  • Ju-Chin Huang, & John M. Halstead, & Shanna B. Saunders, 2011. "Managing Municipal Solid Waste with Unit-Based Pricing: Policy Effects and Responsiveness to Pricing," Land Economics, University of Wisconsin Press, vol. 87(4), pages 645-660.
    • Handle: RePEc:uwp:landec:v:87:y:2011:iv:1:p:645-660
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    References listed on IDEAS

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    6. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 2-16, January.
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    9. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    10. Thomas C. Kinnaman & Don Fullerton, 2002. "Garbage and Recycling with Endogenous Local Policy," Chapters, in: Don Fullerton & Thomas C. Kinnaman (ed.), The Economics of Household Garbage and Recycling Behavior, chapter 6, pages 120-143, Edward Elgar Publishing.
    11. Kennedy, Peter E, 1981. "Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations [The Interpretation of Dummy Variables in Semilogarithmic Equations]," American Economic Review, American Economic Association, vol. 71(4), pages 801-801, September.
    12. Seonghoon Hong & Richard M. Adams, 1999. "Household Responses to Price Incentives for Recycling: Some Further Evidence," Land Economics, University of Wisconsin Press, vol. 75(4), pages 505-514.
    13. Linderhof, Vincent & Kooreman, Peter & Allers, Maarten & Wiersma, Doede, 2001. "Weight-based pricing in the collection of household waste: the Oostzaan case," Resource and Energy Economics, Elsevier, vol. 23(4), pages 359-371, October.
    14. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 27-28, January.
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    Citations

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    Cited by:

    1. Takehiro Usui & Kenji Takeuchi, 2014. "Evaluating Unit-Based Pricing of Residential Solid Waste: A Panel Data Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(2), pages 245-271, June.
    2. Mikołaj Czajkowski & Nick Hanley & Karine Nyborg, 2014. "Social norms, morals and self-interest as determinants of pro-environment behaviour," Working Papers 2014-17, Faculty of Economic Sciences, University of Warsaw.
    3. Bueno, Matheus & Valente, Marica, 2019. "The effects of pricing waste generation: A synthetic control approach," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 274-285.
    4. Alessandro Bucciol & Roberta Muri & Francesca Rossi, 2023. "Municipal Waste Policies and Spillover Effects," Working Papers 05/2023, University of Verona, Department of Economics.
    5. Bel, Germà & Gradus, Raymond, 2016. "Effects of unit-based pricing on household waste collection demand: A meta-regression analysis," Resource and Energy Economics, Elsevier, vol. 44(C), pages 169-182.
    6. Damiano Fiorillo & Luigi Senatore, 2020. "Pro-social behaviours, waste concern and recycling behaviour in Italy at the end of the 1990s," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 22(2), pages 127-151, April.
    7. Valente, Marica, 2023. "Policy evaluation of waste pricing programs using heterogeneous causal effect estimation," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    8. Czajkowski, Mikołaj & Kądziela, Tadeusz & Hanley, Nick, 2014. "We want to sort! Assessing households’ preferences for sorting waste," Resource and Energy Economics, Elsevier, vol. 36(1), pages 290-306.
    9. Giuseppe Lucio Gaeta & Stefano Ghinoi & Francesco Silvestri, 2017. "Municipal performance in waste recycling: an empirical analysis based on data from the Lombardy region (Italy)," Letters in Spatial and Resource Sciences, Springer, vol. 10(3), pages 337-352, October.
    10. Elbert Dijkgraaf & Raymond Gradus, 2017. "An EU Recycling Target: What Does the Dutch Evidence Tell Us?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 501-526, November.
    11. Ek, Claes & Söderberg, Magnus, 2021. "Norm-based feedback on household waste: Large-scale field experiments in two Swedish municipalities," Working Papers in Economics 804, University of Gothenburg, Department of Economics.
    12. repec:sss:wpaper:201403 is not listed on IDEAS
    13. Germà Bel & Raymond Gradus, 2014. "“Effects of unit-based pricing on the waste collection demand: a meta-regression analysis”," IREA Working Papers 201420, University of Barcelona, Research Institute of Applied Economics, revised Jun 2014.

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    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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