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The Diffusion of Local Differentiated Waste Disposal Taxes in the Netherlands

Pim Heijnen () and J.Paul Elhorst

De Economist, 2018, vol. 166, issue 2, 239-258

Abstract: Abstract The diffusion of a novel taxing scheme (among Dutch municipalities over the period 1998–2005) is studied in which the waste disposal tax is increasing in the amount of waste a household produces. Inspection of the rise and spread of this tax shows that it is contagious: the probability of introduction is increasing in the number of neighboring municipalities that have already introduced this taxing scheme. A possible rationale is that the tax encourages the dumping of waste in neighboring municipalities. These municipalities may then introduce a similar tax to prevent dumping (spillover effect). Using panel data and a recently developed spatial probit approach (Elhorst et al. in J Appl Econom 32:422–439, 2017), it is possible to distinguish this spillover effect from time-specific effects. The results indicate the presence of strong spillovers.

Keywords: Waste disposal tax; Diffusion; Spatial probit; Spillovers (search for similar items in EconPapers)
JEL-codes: H23 H73 Q58 R15 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:kap:decono:v:166:y:2018:i:2:d:10.1007_s10645-018-9321-3