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Do Not Trash the Incentive! Monetary Incentives and Waste Sorting

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Author Info

  • Alessandro Bucciol

    ()
    (University of Verona
    University of Amsterdam)

  • Natalia Montinari

    ()
    (Max Planck Institute of Economics.)

  • Marco Piovesan

    ()
    (Harvard Business School)

Abstract

This paper examines whether monetary incentives are an effective tool for increasing domestic waste sorting. We exploit the exogenous variation in the pricing systems experienced during the 1999-2008 decade by the 95 municipalities in the district of Treviso (Italy). We estimate with a panel analysis that pay-as-you-throw (PAYT) incentive-based schemes increase by 12.2% the ratio of sorted to total waste. This increase reflects a change in the behavior of households, who keep unaltered the production of total waste but sort it to a larger extent. In addition, we show that several factors that may discourage local administrators from adopting PAYT - illegal dumping and higher cost of management - are not important at the aggregate level. Hence, our results support the use of PAYT as an effective tool to increase waste sorting.

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File URL: http://www.hbs.edu/research/pdf/11-093.pdf
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Bibliographic Info

Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 11-093.

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Length: 32 pages
Date of creation: Mar 2011
Date of revision:
Handle: RePEc:hbs:wpaper:11-093

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Keywords: Incentives; waste management; PAYT.;

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  1. Paul Missios & Ida Ferrara, 2011. "A Cross-Country Study of Waste Prevention and Recycling," Working Papers 028, Ryerson University, Department of Economics.
  2. Maarten A. Allers & Corine Hoeben, 2010. "Effects of Unit-Based Garbage Pricing: A Differences-in-Differences Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(3), pages 405-428, March.
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