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Environmental activism and dynamics of unit-based pricing systems

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  • Dijkgraaf, Elbert
  • Gradus, Raymond

Abstract

It is well-known that unit-based pricing systems have a significant effect on the quantity of collected waste. Part of this effect may, however, result from a selection bias or environmental activism effect. Based on a pooled cross-section for the Netherlands for 1998-2005 we show that despite the correction for environmental activism the effect of the weight and bag unit-based pricing system on the quantity of waste is sizeable. Moreover, this environmental activism effect is decreasing over time, so that the most environmental friendly municipalities implement unit-based pricing systems at first. In addition, we show that the volume effects of the different unit-based pricing systems are rather stable over time. Although we find some evidence for a learning effect, nearly no evidence is found for an awareness erosion effect. This means at least that the effect of unit-based pricing does not decrease over time, which is reassuring from an environmental point of view. Pricing waste helps.

Suggested Citation

  • Dijkgraaf, Elbert & Gradus, Raymond, 2009. "Environmental activism and dynamics of unit-based pricing systems," Resource and Energy Economics, Elsevier, vol. 31(1), pages 13-23, January.
  • Handle: RePEc:eee:resene:v:31:y:2009:i:1:p:13-23
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    1. Thomas C. Kinnaman, 2006. "Policy Watch: Examining the Justification for Residential Recycling," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 219-232, Fall.
    2. 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.
    3. Dijkgraaf, E. & Gradus, R. H. J. M., 2004. "Cost savings in unit-based pricing of household waste: The case of The Netherlands," Resource and Energy Economics, Elsevier, vol. 26(4), pages 353-371, December.
    4. Kinnaman Thomas C., 2005. "Why do Municipalities Recycle?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-25, February.
    5. Thomas C. Kinnaman & Don Fullerton, 1997. "Garbage and Recycling in Communities with Curbside Recycling and Unit-Based Pricing," NBER Working Papers 6021, National Bureau of Economic Research, Inc.
    6. Calcott, Paul & Walls, Margaret, 2005. "Waste, recycling, and "Design for Environment": Roles for markets and policy instruments," Resource and Energy Economics, Elsevier, vol. 27(4), pages 287-305, November.
    7. Paul Isely & Aaron Lowen, 2007. "Price And Substitution In Residential Solid Waste," Contemporary Economic Policy, Western Economic Association International, vol. 25(3), pages 433-443, July.
    8. Elbert Dijkgraaf & Herman Vollebergh, 2005. "A Test for Parameter Homogeneity in CO 2 Panel EKC Estimations," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(2), pages 229-239, October.
    9. Oecd, 2006. "Impacts of Unit-based Waste Collection Charges," OECD Papers, OECD Publishing, vol. 6(8), pages 1-157.
    10. Timothy K. M. Beatty & Peter Berck & Jay P. Shimshack, 2007. "Curbside Recycling In The Presence Of Alternatives," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 739-755, October.
    11. Linderhof, Vincent & Kooreman, Peter & Allers, Maarten & Wiersma, Doede, 2001. "Weight-based pricing in the collection of household waste: the Oostzaan case," Resource and Energy Economics, Elsevier, vol. 23(4), pages 359-371, October.
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    Cited by:

    1. Takehiro Usui & Kenji Takeuchi, 2014. "Evaluating Unit-Based Pricing of Residential Solid Waste: A Panel Data Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(2), pages 245-271, June.
    2. Elbert Dijkgraaf & Raymond Gradus, 2014. "The Effectiveness of Dutch Municipal Recycling Policies," Tinbergen Institute Discussion Papers 14-155/VI, Tinbergen Institute.
    3. Maarten A. Allers & Corine Hoeben, 2010. "Effects of Unit-Based Garbage Pricing: A Differences-in-Differences Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(3), pages 405-428, March.
    4. Cecere, Grazia & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Waste prevention and social preferences: the role of intrinsic and extrinsic motivations," Ecological Economics, Elsevier, vol. 107(C), pages 163-176.
    5. Cainelli, Giulio & D’Amato, Alessio & Mazzanti, Massimiliano, 2015. "Adoption of waste-reducing technology in manufacturing: Regional factors and policy issues," Resource and Energy Economics, Elsevier, vol. 39(C), pages 53-67.
    6. D’Amato, Alessio & Mazzanti, Massimiliano & Nicolli, Francesco, 2015. "Waste and organized crime in regional environments," Resource and Energy Economics, Elsevier, vol. 41(C), pages 185-201.
    7. Houévoh Amandine R. Gnonlonfin, 2016. "An evaluation of French municipal solid waste pricing system," Working Papers 2016.18, FAERE - French Association of Environmental and Resource Economists.
    8. Elbert Dijkgraaf & Raymond Gradus, 2015. "Efficiency Effects of Unit-Based Pricing Systems and Institutional Choices of Waste Collection," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(4), pages 641-658, August.
    9. Bel, Germà & Gradus, Raymond, 2016. "Effects of unit-based pricing on household waste collection demand: A meta-regression analysis," Resource and Energy Economics, Elsevier, vol. 44(C), pages 169-182.
    10. repec:eee:ecolec:v:148:y:2018:i:c:p:131-151 is not listed on IDEAS
    11. Raymond (R.H.J.M.) Gradus & Elbert (E.) Dijkgraaf, 2017. "Dutch Municipalities are Becoming Greener: Some Political and Institutional Explanations," Tinbergen Institute Discussion Papers 17-086/VIII, Tinbergen Institute.
    12. Carattini, Stefano & Baranzini, Andrea & Lalive, Rafael, 2018. "Is Taxing Waste a Waste of Time? Evidence from a Supreme Court Decision," Ecological Economics, Elsevier, vol. 148(C), pages 131-151.
    13. Alessio D'Amato & Massimiliano Mazzanti & Francesco Nicolli, 2011. "Waste Sustainability, Environmental Management and Mafia: Analysing Geographical and Economic Dimensions," CEIS Research Paper 213, Tor Vergata University, CEIS, revised 24 Oct 2011.
    14. Alessio D'Amato & Massimiliano Mazzanti & Francesco Nicolli & Mariangela Zoli, 2014. "Illegal Waste Disposal, Territorial Enforcement and Policy. Evidence from regional data," SEEDS Working Papers 0314, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Feb 2014.
    15. repec:spr:endesu:v:19:y:2017:i:6:d:10.1007_s10668-016-9857-9 is not listed on IDEAS

    More about this item

    Keywords

    Unit-based pricing Selection bias Dynamics Learning effect;

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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