Environmental activism and dynamics of unit-based pricing systems

Elbert Dijkgraaf and Raymond Gradus ()

No 11, Serie Research Memoranda from VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics

Abstract: It is well-known that unit-based pricing systems have a significant effect on the quantity of collected waste. Part of this effect may, however, result from a selection bias or environmental activism effect. Based on a pooled cross-section for the Netherlands for 1998- 2005 we show that despite the correction for environmental activism the effect of the weight and bag unit-based pricing system on the quantity of waste is sizeable. Moreover, this environmental activism effect is decreasing over time, so that the most environmental friendly municipalities implement unit-based pricing systems at first. In addition, we show that the volume-effects of the different unit-based pricing systems are rather stable over time. Although we find some evidence for a learning effect, nearly no evidence is found for an awareness erosion effect. This means at least that the effect of unit-based pricing does not decrease over time, which is reassuring from an environmental point of view. Pricing waste helps.

Keywords: Unit-based pricing; selection bias, dynamics; learning effect (search for similar items in EconPapers)
JEL-codes: H31 H71 Q38 (search for similar items in EconPapers)
Date: 2008
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Journal Article: Environmental activism and dynamics of unit-based pricing systems (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:vua:wpaper:2008-11

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