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The Effects of Pricing Waste Generation: A Synthetic Control Approach

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  • Matheus Bueno
  • Marica Valente

Abstract

To internalize pollution externalities into household waste generation, Unit Pricing Systems (UPS) have been adopted worldwide. This paper evaluates the causal effects of a UPS on the disposal of municipal solid waste in Trento, Italy. To account for policy endogeneity due to unobservables, we employ the synthetic control method on a unique panel of monthly waste generation. Our results show that the policy was effective, with a significant decrease of the priced waste stream,unsorted waste, by 37.5%. This effect seems to be largely driven by behavioral changes towards waste avoidance (-8,6%) and a minor increase in recycling (+6,1%).

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  • Matheus Bueno & Marica Valente, 2018. "The Effects of Pricing Waste Generation: A Synthetic Control Approach," Discussion Papers of DIW Berlin 1737, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1737
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    Cited by:

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    5. Emrah Kocak & Hayriye Hilal Baglitas, 2022. "The path to sustainable municipal solid waste management: Do human development, energy efficiency, and income inequality matter?," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1947-1962, December.
    6. Cabrera, José María & Caffera, Marcelo & Cid, Alejandro, 2020. "Small Incentives May Have Large Effects: The Impact of Prices on the Demand for Plastic Bags," MPRA Paper 100178, University Library of Munich, Germany.
    7. 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.
    8. Weimin Zhang & Wangrong Ma & Qiwei Chen, 2022. "Does Regional Development Policy Promote Industrial Structure Upgrading? Evidence from the Yangtze River Delta in China," Sustainability, MDPI, vol. 14(13), pages 1-21, July.
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    10. Valente, Marica, 2023. "Policy evaluation of waste pricing programs using heterogeneous causal effect estimation," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    11. Picchio, Matteo, 2021. "Microchip Bags and Waste Sorting," GLO Discussion Paper Series 772, Global Labor Organization (GLO).
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    14. Marica Valente & Timm Gries & Lorenzo Trapani, 2023. "Informal employment from migration shocks," Working Papers 2023-09, Faculty of Economics and Statistics, Universität Innsbruck.
    15. Fontecha, John E. & Nikolaev, Alexander & Walteros, Jose L. & Zhu, Zhenduo, 2022. "Scientists wanted? A literature review on incentive programs that promote pro-environmental consumer behavior: Energy, waste, and water," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    16. Leonzio Rizzo & Riccardo Secomandi, 2020. "Pay as you throw: evidence on the incentive to recycle," Working papers 88, Società Italiana di Economia Pubblica.
    17. Tommaso Colussi & Matteo Romagnoli & Elena Villar, 2022. "The Intended and Unintended Consequences of Taxing Waste," CESifo Working Paper Series 9946, CESifo.
    18. Xiufeng Xing & Xueying Zhang, 2020. "Spillovers of Urban Road Infrastructure Investment and Operation: a Case Study Using Synthetic Control Method," Business, Management and Economics Research, Academic Research Publishing Group, vol. 6(10), pages 127-134, 10-2020.
    19. Pfister, Naomi & Mathys, Nicole A., 2022. "Waste taxes at work: Evidence from the canton of Vaud in Switzerland," Ecological Economics, Elsevier, vol. 193(C).
    20. Alessandro Bucciol & Roberta Muri & Francesca Rossi, 2023. "Municipal Waste Policies and Spillover Effects," Working Papers 05/2023, University of Verona, Department of Economics.
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    22. Di Foggia, Giacomo & Beccarello, Massimo, 2023. "Designing circular economy-compliant municipal solid waste management charging schemes," Utilities Policy, Elsevier, vol. 81(C).

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    More about this item

    Keywords

    Waste generation; unit pricing; synthetic controls;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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