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The Effect of Experience and Quantity-Based Pricing of the Valuation of the Curbside Recycling Program

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  • Arthur Caplan
  • Therese Grijalva
  • Alok Bohara

Abstract

Quantity-based pricing for garbage collection services and recycling programs are becoming increasingly popular methods of meeting municipal solid waste diversion objectives. This article investigates household willingness to pay (WTP) for a pilot curbside recycling program (CRP) in the presence of a quantity-based pricing scheme for garbage collection services. The pilot CRP provides a unique treatment effect that more precisely determines a household's level of real experience with curbside recycling than may be accomplished by respondents simply stating their experience levels. Moreover, unlike previous studies that have modeled the simultaneity of these household decisions as a two-step process, we jointly estimate the household's intentions using a full-information maximum-likelihood (FIML) approach. We find that participants in the pilot CRP are more likely than non-participants to reduce their container size and that for those that intend to reduce their container size, WTP for participants is larger than for non-participants. Taken together, these results suggest that the benefits of curbside recycling may be closely linked with the availability of a quantity-based pricing scheme for garbage collection. In particular, there appears to be a virtuous cycle for the household between choosing to recycle and reducing the size of its garbage container.

Suggested Citation

  • Arthur Caplan & Therese Grijalva & Alok Bohara, 2004. "The Effect of Experience and Quantity-Based Pricing of the Valuation of the Curbside Recycling Program," Working Papers 2004-15, Utah State University, Department of Economics.
  • Handle: RePEc:usu:wpaper:2004-15
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    References listed on IDEAS

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    1. David Aadland & Arthur J. Caplan, 2006. "Curbside recycling: Waste resource or waste of resources?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(4), pages 855-874.
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    Cited by:

    1. Brekke, Kjell Arne & Kipperberg, Gorm & Nyborg, Karine, 2009. "Reluctant Recyclers: Social Interaction in Responsibility Ascription," Memorandum 16/2007, Oslo University, Department of Economics.
    2. Kjell Arne Brekke & Gorm Kipperberg & Karine Nyborg, 2010. "Social Interaction in Responsibility Ascription: The Case of Household Recycling," Land Economics, University of Wisconsin Press, vol. 86(4), pages 766-784.
    3. Gorm Kipperberg & Douglas Larson, 2012. "Heterogeneous Preferences for Community Recycling Programs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(4), pages 577-604, December.
    4. Lyssenko, Nikita & Martinez-Espineira, Roberto, 2009. "`Been there done that': Disentangling option value effects from user heterogeneity when valuing natural resources with a use component," MPRA Paper 21976, University Library of Munich, Germany, revised 08 Apr 2010.

    More about this item

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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