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Managing Municipal Solid Waste with Unit-Based Pricing: Policy Effects and Responsiveness to Pricing

Author

Listed:
  • Ju-Chin Huang,
  • John M. Halstead,
  • Shanna B. Saunders

Abstract

Many municipalities across the United States have turned to unit based pricing—also known as pay as you throw (PAYT)—as a vehicle for reducing municipal solid waste generation, increasing recycling, and promoting equity in paying for the service. In this paper, we reevaluate the standard analytical methods used to examine the impact of PAYT in the literature and illustrate that econometric shortcomings may have led to underestimation of policy effects. A two-tier analytical approach to examining PAYT program effects is proposed and is demonstrated in a case study of New Hampshire municipalities.

Suggested Citation

  • Ju-Chin Huang, & John M. Halstead, & Shanna B. Saunders, 2011. "Managing Municipal Solid Waste with Unit-Based Pricing: Policy Effects and Responsiveness to Pricing," Land Economics, University of Wisconsin Press, vol. 87(4), pages 645-660.
  • Handle: RePEc:uwp:landec:v:87:y:2011:iv:1:p:645-660
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    References listed on IDEAS

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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. Kinnaman, Thomas C. & Fullerton, Don, 2000. "Garbage and Recycling with Endogenous Local Policy," Journal of Urban Economics, Elsevier, vol. 48(3), pages 419-442, November.
    3. 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.
    4. 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.
    5. 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.
    6. James D. Reschovsky & Sarah E. Stone, 1994. "Market incentives to encourage household waste recycling: Paying for what you throw away," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(1), pages 120-139.
    7. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 2-16, January.
    8. Kennedy, Peter E, 1981. "Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations [The Interpretation of Dummy Variables in Semilogarithmic Equations]," American Economic Review, American Economic Association, vol. 71(4), pages 801-801, September.
    9. Seonghoon Hong & Richard M. Adams, 1999. "Household Responses to Price Incentives for Recycling: Some Further Evidence," Land Economics, University of Wisconsin Press, vol. 75(4), pages 505-514.
    10. Scott J. Callan & Janet M. Thomas, 1997. "The Impact of State and Local Policies on the Recycling Effort," Eastern Economic Journal, Eastern Economic Association, vol. 23(4), pages 411-423, Fall.
    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.
    12. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    13. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 27-28, January.
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    Cited by:

    1. repec:kap:enreec:v:68:y:2017:i:3:d:10.1007_s10640-016-0027-1 is not listed on IDEAS
    2. Czajkowski, Mikołaj & Kądziela, Tadeusz & Hanley, Nick, 2014. "We want to sort! Assessing households’ preferences for sorting waste," Resource and Energy Economics, Elsevier, vol. 36(1), pages 290-306.
    3. Mikołaj Czajkowski & Nick Hanley & Karine Nyborg, 2014. "Social norms, morals and self-interest as determinants of pro-environment behaviour," Working Papers 2014-17, Faculty of Economic Sciences, University of Warsaw.
    4. 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.
    5. repec:sss:wpaper:201403 is not listed on IDEAS
    6. Germà Bel & Raymond Gradus, 2014. "“Effects of unit-based pricing on the waste collection demand: a meta-regression analysis”," IREA Working Papers 201420, University of Barcelona, Research Institute of Applied Economics, revised Jun 2014.

    More about this item

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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