Analyzing Demand For Disposal And Recycling Services: A Systems Approach

Abstract

Pricing municipal solid waste (MSW) services using a flat fee offers no incentive to conserve on disposal. This has prompted the use of unit pricing schemes, which should reduce disposal in accordance with demand theory and encourage alternatives such as recycling. Most studies estimate distinct demand equations for disposal and recycling, and none use a systems approach to simultaneous estimate them. To that end, this research estimates such a model, which also recognizes the endogeneity of policy variables. The results offer important policy insight and shed light on the effectiveness of unit pricing in reducing disposal and simultaneously encouraging recycling.