"Household Responses for Pricing Garbage by the Bag,"
Don Fullerton, Thomas C. Kinnaman
NBER Working Paper No. 4670
This paper estimates household reaction to the implementation of unit-pricing for the collection of residential garbage. We gather original data on weight and volume of weekly garbage and recycling of 75 households in Charlottesville, Virginia, both before and after the start of a program that requires an eighty-cent sticker on each bag of garbage. This data set is the first of its kind. We estimate household demands for the collection of garbage and recyclable material, the effect on density of household garbage, and the amount of illegal dumping by households. We also estimate the probability that a household chooses each method available to reduce its garbage. In response to the implementation of this unit-pricing program, we find that households (1) reduced the weight of their garbage by 14%, (2) reduced the volume of garbage by 37% and (3) increased the weight of their recyclable materials by 16%. We estimate that additional illegal -- or at least suspicious -- disposal accounts for 0.42 pounds per person per week, or 28% of the reduction in garbage observed at the curb.
Published: American Economic Review, vol.86, no.4, (September,1996), pp.971-984