Garbage and Recycling with Endogenous Local Policy*
This chapter estimates the impact of garbage fees and curbside recycling programs on garbage and recycling amounts. Without correction for endogenous policy, a price per bag of garbage has a negative effect on garbage and a positive cross-price effect on recycling. Correction for endogenous local policy increases the effect of the user fee on garbage and the effect of curbside recycling collection on recycling. Many communities have also adopted curbside recycling programs to help deal with their solid waste problems. Each local government has several policy instruments available to control the quantities of garbage, recycling, and illegal dumping. The two primary policies of concern are free curbside recycling and a user fee for garbage. Each local government is assumed to compare the costs and benefits of implementing a curbside recycling program. The first benefit to the community is the reduction in garbage collected times the tipping fee that must be paid to the regional landfill.