The effects of pricing waste generation: A synthetic control approach

Matheus Bueno and Marica Valente

Journal of Environmental Economics and Management, 2019, vol. 96, issue C, 274-285

Abstract: To internalize pollution externalities into household waste generation, Unit Pricing Systems (UPS) have been adopted worldwide. This paper evaluates the causal effects of a UPS on the disposal of municipal solid waste in Trento, Italy. Using a unique panel dataset of monthly waste generation in Italian municipalities, we employ the synthetic control method, which allows us to account for possible time-varying effects of unobservables. Our results show that the policy was effective, with a significant decrease of the priced waste stream, unsorted waste, by 37.5%. This effect seems to be largely driven by behavioral changes towards waste avoidance (−8.6%) and possibly by a smaller increase in recycling (+6.1%). By comparing these results to those obtained by a difference-in-differences approach, we show that failing to account for time-varying effects of unobservables may lead to a mismeasurement of policy effects.

Keywords: Waste generation; Unit pricing; Synthetic controls; Policy endogeneity; Selection on unobservables (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (27)

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Journal Article: The effects of pricing waste generation: A synthetic control approach (2019)
Working Paper: The Effects of Pricing Waste Generation: A Synthetic Control Approach (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:96:y:2019:i:c:p:274-285

DOI: 10.1016/j.jeem.2019.06.004

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