ABSTRACT

There are two ways to encourage a socially optimal degree of recycling-pricepolicies and nonprice policies. We look first, and extensively, at price policies.In Chapter 3, we considered the waste pricing problem when the household faced the very simplest decision: whether to reduce, to reuse, or to legally discard the trash. Then in Chapter 6, we introduced the possibility of illegal disposal. In each case, we looked for the pricing structure that would induce the household to make the socially correct discard decision. Now we expand this choice into the contemporary world, where the household also faces the possibility (for many products) of recycling.