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Does Waste Management Policy Crowd out Social and Moral Motives for Recycling?

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  • Paul Missios

    ()
    (Department of Economics, Ryerson University, Toronto, Canada)

  • Ida Ferrara

    ()
    (Department of Economics, York University, Toronto, Canada)

Abstract

In this paper, we consider households' decision of whether to recycle within a theoretical framework that allows for the inclusion of social and moral motivations. The former comes from valuing social approval while the latter comes from valuing self-image. In the context of our theoretical framework, we introduce a unit pricing system and, separately, mandatory recycling and analyze how each affects the equilibrium in terms of whether a society recycles. We show that a unit pricing system enhances the effect of intrinsic motivation (there is crowding in) while mandatory recycling erodes it (there is crowding out) provided that the marginal utility of self-image falls short of the cost of recycling relative to the environmental benefit of living in a society in which everyone recycles. If mandatory recycling is accompanied by an improvement in recycling services that applies to all recyclables and not just the mandated recyclables, crowding out becomes less likely to occur; if the improved services only apply to the mandated recyclables, there is however no effect on the potential for crowding out. Using an international household-level data set, we find support for the hypothesis that mandatory recycling can lead to crowding out while unit pricing does and, to some extent, can relate the potential for crowding out to higher recycling costs.

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Bibliographic Info

Paper provided by Ryerson University, Department of Economics in its series Working Papers with number 031.

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Length: 38 pages
Date of creation: Aug 2012
Date of revision:
Handle: RePEc:rye:wpaper:wp031

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Keywords: Unit Pricing; Mandatory Recycling; Social Motivation; Moral Motivation; Crowding in; Crowding out;

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References

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  1. Ida Ferrara & Paul Missios, 2005. "Recycling and Waste Diversion Effectiveness: Evidence from Canada," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 30(2), pages 221-238, 02.
  2. Nyborg, Karine & Howarth, Richard B. & Brekke, Kjell Arne, 2003. "Green consumers and public policy: On socially contingent moral motivation," Memorandum 31/2003, Oslo University, Department of Economics.
  3. James Andreoni & A. Abigail Payne, 2010. "Is Crowding Out Due Entirely to Fundraising? Evidence from a Panel of Charities," Department of Economics Working Papers 2010-08, McMaster University.
  4. Frans van Dijk & Joep Sonnemans & Frans van Winden, 1996. "Social Ties in a Public Good Experiment," Tinbergen Institute Discussion Papers 96-178/1, Tinbergen Institute.
  5. Kenneth S. Chan & Rob Godby & Stuart Mestelman & R. Andrew Muller, 1998. "Crowding Out Voluntary Contributions to Public Goods," Department of Economics Working Papers 1998-03, McMaster University.
  6. Lindbeck, A, 1996. "Incentives and Social Norms in Household Behavior," Papers 622, Stockholm - International Economic Studies.
  7. Brekke, Kjell Arne & Kverndokk, Snorre & Nyborg, Karine, 2003. "An economic model of moral motivation," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1967-1983, September.
  8. Choe, Chongwoo & Fraser, Iain, 1998. "The economics of household waste management: a review," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 42(3), September.
  9. Ida Ferrara & Paul Missios, 2012. "A Cross-Country Study of Household Waste Prevention and Recycling: Assessing the Effectiveness of Policy Instruments," Land Economics, University of Wisconsin Press, vol. 88(4), pages 710-744.
  10. Kjell Arne Brekke & Gorm Kipperberg & Karine Nyborg, 2010. "Social Interaction in Responsibility Ascription: The Case of Household Recycling," Land Economics, University of Wisconsin Press, vol. 86(4), pages 766-784.
  11. Jonathan Gruber & Daniel M. Hungerman, 2005. "Faith-Based Charity and Crowd Out during the Great Depression," NBER Working Papers 11332, National Bureau of Economic Research, Inc.
  12. Ida Ferrara, 2011. "Illegal Disposal And Waste Collection Frequency," Pacific Economic Review, Wiley Blackwell, vol. 16(2), pages 255-266, 05.
  13. Nyborg, Karine & Rege, Mari, 2003. "On social norms: the evolution of considerate smoking behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 52(3), pages 323-340, November.
  14. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
  15. James Andreoni & A. Abigail Payne, 2011. "Crowding-Out Charitable Contributions in Canada: New Knowledge from the North," NBER Working Papers 17635, National Bureau of Economic Research, Inc.
  16. Ida Ferrara, 2003. "Differential Provision of Solid Waste Collection Services in the Presence of Heterogeneous Households," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(2), pages 211-226, October.
  17. Dinan Terry M., 1993. "Economic Efficiency Effects of Alternative Policies for Reducing Waste Disposal," Journal of Environmental Economics and Management, Elsevier, vol. 25(3), pages 242-256, November.
  18. Hong Seonghoon & Adams Richard M. & Love H. Alan, 1993. "An Economic Analysis of Household Recycling of Solid Wastes: The Case of Portland, Oregon," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 136-146, September.
  19. Blamey, Russell K., 1998. "Decisiveness, attitude expression and symbolic responses in contingent valuation surveys," Journal of Economic Behavior & Organization, Elsevier, vol. 34(4), pages 577-601, March.
  20. George L. Van Houtven & Glenn E. Morris, 1999. "Household Behavior under Alternative Pay-as-You-Throw Systems for Solid Waste Disposal," Land Economics, University of Wisconsin Press, vol. 75(4), pages 515-537.
  21. Don Fullerton & Thomas C. Kinnaman, 1993. "Garbage, Recycling, and Illicit Burning or Dumping," NBER Working Papers 4374, National Bureau of Economic Research, Inc.
  22. Jenkins, Robin R. & Martinez, Salvador A. & Palmer, Karen & Podolsky, Michael J., 2003. "The determinants of household recycling: a material-specific analysis of recycling program features and unit pricing," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 294-318, March.
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