Abstract
Using a unique 10-year dataset of all 458 Dutch municipalities, we apply a differences-in-differences approach to estimate the effect of unit-based pricing on household waste quantities and recycling. Community-level studies of unit-based pricing typically do not include fixed effects at the local level. We find that failure to do so may substantially inflate the estimated price effect. We also find that unit-based pricing may be endogenous, and use instrumental variables to account for this. Our analysis shows that user fees depend on user fees in neighboring jurisdictions (policy interaction). Our estimate of the garbage reduction per $1 user fee is lower than any previous estimate bar one. The price effect depends on the pricing system: weight-based systems reduce garbage quantities more than volume-based systems. User fees increase recycling, especially of paper, but not nearly as much as they reduce garbage quantities. We find no evidence for waste tourism or illegal dumping.
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Acknowledgements
The authors thank Elbert Dijkgraaf, Raymond Gradus and two anonymous referees for their helpful comments, and Simon Boddeüs and Mark Kruidhof for their assistance in obtaining the data.
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Open Access This is an open access article distributed under the terms of the Creative Commons Attribution Noncommercial License (https://creativecommons.org/licenses/by-nc/2.0), which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.
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A. Allers, M., Hoeben, C. Effects of Unit-Based Garbage Pricing: A Differences-in-Differences Approach. Environ Resource Econ 45, 405–428 (2010). https://doi.org/10.1007/s10640-009-9320-6
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DOI: https://doi.org/10.1007/s10640-009-9320-6