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Environmental activism and dynamics of unit-based pricing systems

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Author Info
Dijkgraaf, E. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)
Gradus, R.

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Abstract

It is well-known that unit-based pricing systems have a significant effect on the quantity of collected waste. Part of this effect may, however, result from a selection bias or environmental activism effect. Based on a pooled cross-section for the Netherlands for 1998- 2005 we show that despite the correction for environmental activism the effect of the weight and bag unit-based pricing system on the quantity of waste is sizeable. Moreover, this environmental activism effect is decreasing over time, so that the most environmental friendly municipalities implement unit-based pricing systems at first. In addition, we show that the volume-effects of the different unit-based pricing systems are rather stable over time. Although we find some evidence for a learning effect, nearly no evidence is found for an awareness erosion effect. This means at least that the effect of unit-based pricing does not decrease over time, which is reassuring from an environmental point of view. Pricing waste helps.

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Publisher Info
Paper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0011.

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Date of creation: 2008
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Handle: RePEc:dgr:vuarem:2008-11

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Related research
Keywords: Unit-based pricing; selection bias; dynamics; learning effect;

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Find related papers by JEL classification:
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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  1. 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. [Downloadable!] (restricted)
  2. Dijkgraaf, E. & Gradus, R. H. J. M., 2004. "Cost savings in unit-based pricing of household waste: The case of The Netherlands," Resource and Energy Economics, Elsevier, vol. 26(4), pages 353-371, December. [Downloadable!] (restricted)
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  3. Paul Isely & Aaron Lowen, 2007. "Price And Substitution In Residential Solid Waste," Contemporary Economic Policy, Western Economic Association International, vol. 25(3), pages 433-443, 07. [Downloadable!] (restricted)
  4. Timothy K. M. Beatty & Peter Berck & Jay P. Shimshack, 2007. "Curbside Recycling In The Presence Of Alternatives," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 739-755, October. [Downloadable!] (restricted)
  5. Thomas C. Kinnaman & Don Fullerton, 1997. "Garbage and Recycling in Communities with Curbside Recycling and Unit-Based Pricing," NBER Working Papers 6021, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Fullerton, Don & Kinnaman, Thomas C, 1996. "Household Responses to Pricing Garbage by the Bag," American Economic Review, American Economic Association, vol. 86(4), pages 971-84, September. [Downloadable!] (restricted)
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  7. Calcott, Paul & Walls, Margaret, 2005. "Waste, recycling, and "Design for Environment": Roles for markets and policy instruments," Resource and Energy Economics, Elsevier, vol. 27(4), pages 287-305, November. [Downloadable!] (restricted)
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