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Optimal Waste Disposal Fees When Product Durability is Endogenous: Accounting for Planned Obsolescence

Author

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  • Hiroshi Kinokuni

    (Ritsumeikan University)

  • Shuichi Ohori

    (Kansai University)

  • Yasunobu Tomoda

    (Kobe City University of Foreign Studies)

Abstract

Considering the Coase conjecture (J Law Econ 15:143–149, 1972), we explore the optimal disposal fee of solid waste through the choice of product durability by a producer. We find that introducing a disposal fee curbs planned obsolescence and increases product durability. This increased durability decreases the social cost of waste and increases the service flow from the durable product. Therefore, the optimal disposal fee is higher than the Pigouvian level in the closed-loop.

Suggested Citation

  • Hiroshi Kinokuni & Shuichi Ohori & Yasunobu Tomoda, 2019. "Optimal Waste Disposal Fees When Product Durability is Endogenous: Accounting for Planned Obsolescence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 33-50, May.
    • Handle: RePEc:kap:enreec:v:73:y:2019:i:1:d:10.1007_s10640-018-0248-6
    DOI: 10.1007/s10640-018-0248-6
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    References listed on IDEAS

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    Cited by:

    1. Compagnoni, Marco & Grazzi, Marco & Pieri, Fabio & Tomasi, Chiara, 2023. "Extended producer responsibility and trade flows in waste: The case of batteries," FEEM Working Papers 338789, Fondazione Eni Enrico Mattei (FEEM).
    2. Kinokuni, Hiroshi & Ohori, Shuichi & Tomoda, Yasunobu, 2021. "Advance disposal fee vs. disposal fee: A monopolistic producer’s durability choice model," Resource and Energy Economics, Elsevier, vol. 65(C).
    3. Don Fullerton & Shan He, 2021. "Do Market Failures Create a ‘Durability Gap’ in the Circular Economy?," NBER Working Papers 29073, National Bureau of Economic Research, Inc.

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