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The indirect environmental effects of taxing waste

Author

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  • Colussi, Tommaso
  • Romagnoli, Matteo
  • Villar, Elena

Abstract

This paper investigates the indirect effects of environmental policies that target waste production, i.e., pay-as-you-throw (PAYT) schemes. Using a newly constructed longitudinal dataset of Italian municipalities and a stacked difference-in-differences design, we find that PAYT adoption generates positive effects on pro-environmental behaviors not directly targeted by the policy (indirect effects), in addition to reducing unsorted waste production (direct effect). Survey evidence shows that PAYT increases the salience of environmental issues among treated residents, which in turn strengthens their pro-environmental attitudes. These findings suggest that narrowly targeted environmental policies can lead to broader behavioral changes by fostering environmental awareness.

Suggested Citation

  • Colussi, Tommaso & Romagnoli, Matteo & Villar, Elena, 2025. "The indirect environmental effects of taxing waste," Journal of Economic Behavior & Organization, Elsevier, vol. 239(C).
    • Handle: RePEc:eee:jeborg:v:239:y:2025:i:c:s016726812500366x
    DOI: 10.1016/j.jebo.2025.107247
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    Keywords

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    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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