Reduce, Reuse, Redeem: Deposit-Refund Recycling Programs in the Presence of Alternatives

We estimate consumer preferences and willingness to pay for current beverage container recycling methods, including curbside pick-up services, drop-off at government-subsidized recycling centers, and drop-off at non-subsidized centers. Using a representative online and telephone survey of California households, we estimate a discrete choice model that identifies the key attributes explaining consumers’ beverage container disposal decisions: the refund amount (paid to consumers only if they recycle at drop-off centers), the volume of recyclable material generated by the household, and the effort associated with bringing recyclable materials to recycling centers. Additionally, we use counterfactual policy analy- sis to show that increasing the refund amount increases overall recycling rates, with the largest changes in consumer surplus accruing to inframarginal consumers, who are on the boundary between taking containers to recycling centers and recycling using curbside pick-up, namely white and higher income consumers. Conversely, we show that eliminating government-subsidized drop-off centers does not significantly alter consumer surplus for any major demographic group, and has little impact on recycling rates.