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The Effect of Bottle Laws on Income: New Empirical Results


  • Bevin Ashenmiller


Eleven US states have "bottle laws," deposit-refund programs that combine a consumption tax with a recycling rebate. When states set the bottle deposit low enough it becomes a tax on high wage earners, for whom the opportunity cost of their time prevents them from returning containers for their deposit. However, this bottle deposit will still be high enough that harvesting recyclables provides employment for low wage earners. Using individual data on observed cash recycling behavior, this paper shows that an unintended consequence of bottle laws is that they have the potential to increase the incomes of very low wage workers.

Suggested Citation

  • Bevin Ashenmiller, 2011. "The Effect of Bottle Laws on Income: New Empirical Results," American Economic Review, American Economic Association, vol. 101(3), pages 60-64, May.
  • Handle: RePEc:aea:aecrev:v:101:y:2011:i:3:p:60-64

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    References listed on IDEAS

    1. Fullerton, Don & Kinnaman, Thomas C, 1996. "Household Responses to Pricing Garbage by the Bag," American Economic Review, American Economic Association, vol. 86(4), pages 971-984, September.
    2. West, Sarah E. & Williams, R.C.Roberton III, 2004. "Estimates from a consumer demand system: implications for the incidence of environmental taxes," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 535-558, May.
    3. Bevin Ashenmiller, 2010. "Externalities from Recycling Laws: Evidence from Crime Rates," American Law and Economics Review, Oxford University Press, vol. 12(1), pages 245-261.
    4. Bevin Ashenmiller, 2009. "Cash Recycling, Waste Disposal Costs, and the Incomes of the Working Poor: Evidence from California," Land Economics, University of Wisconsin Press, vol. 85(3), pages 539-551.
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    Cited by:

    1. Michal Struk, 2015. "Distance and Incentives Matter: The Separation of Recyclable Municipal Waste," Working Papers 18, Masaryk University, Faculty of Economics and Administration, Department of Public Economics, revised Jul 2016.

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