The effect of experience and quantity-based pricing on the valuation of a curbside recycling program

Quantity-based pricing for garbage collection services and recycling programs are becoming increasingly popular methods of meeting municipal solid waste diversion objectives. This article investigates household willingness to pay (WTP) for a pilot curbside recycling program (CRP) in the presence of a quantity-based pricing scheme for garbage collection services, which allows a household to alter their garbage container size at a reduced price. Unlike previous studies that have modeled the simultaneity of these household decisions as a two-step process, we jointly estimate the household's intentions using a full-information maximum-likelihood (FIML) approach. Our results show a strong positive correlation between a household's WTP for a CRP and its stated intention to reduce its garbage container size when a CRP is offered. The positive correlation suggests that WTP will be higher for households which are more likely to reduce their garbage container size. Thus, in the presence of quantity-based pricing, a household's WTP for recycling more fully reflects the marginal social costs of garbage disposal.     

Resource and Waste Taxation in the Theory of the Firm with Recycling Activities

The management of solid waste has become an urgent problem in nations with a great population density. Accordingly, waste reduction through source reduction and recycling has become increasingly important. Our purpose is to show how prevention, recycling and disposal of waste could be part of a theory of the firm. We first derive efficient production functions from production processes with waste as a by-product. Waste obtained as new scrap can partially be recycled by using additional inputs in order to cut back the purchase of virgin material. Waste not completely recyclable will leave the firm as disposal which also entails cost to the firm. We use the dual cost function approach to develop a theory of the firm under solid residual management.Since the producer does not bear the full cost of disposal, there will be a bias toward virgin materials and away from recycling. The goal of the government is to stimulate the firms to recycle with respect to the preservation of exhaustible resources. An incentive to recycle is a tax on resources or on waste. In order to determine the tax levels the government maximizes welfare subject to the dynamic constraint for decumulation of land fill for waste deposits. This gives the user cost and its time profile for taxing waste disposal or virgin material.In a comparative statics analysis we compare the effect of taxes on waste vs. virgin material on effort to produce in a resource saving manner, on the quantity of recycled material, on output, and on the reduction of waste. Since the impact of environmental regulation on employment is important, our model detects seven effects on labor demand as part of resource conservation policy. We finally carry out a comparative statics analysis of waste intensive firms operating in different market structures. Of interest is the impact of a resource or waste taxation on market volume, on the number of firms, on resource saving effort, and on profit.     

Multidimensional Bargaining Under Asymmetric Information

A buyer with private information regarding marginal valuation bargains with a seller to determine price and quantity of trade. Depending on parameter values, a high‐valuation buyer wants either to reveal information to create value or to conceal it to capture value. In the first case, equilibrium trades are efficient. In the second case, the low‐valuation buyer purchases less than her efficient quantity, and there can be a one‐period delay in trade. The quantity distortion is the only inefficiency that persists when time between offers approaches zero. There exist equilibria that are independent of the seller's prior beliefs.     

Wasting Time? Recycling Incentives in Urban Taiwan and Japan

What makes recycling work? We study the factors driving household waste disposal and recycling in 18 cities in Taiwan and Japan in order to understand the impact of alternative waste management incentives. We show that this depends on the effect of distinct policies on the relative costs of the main alternative disposal methods: recycling, disposal to landfill and illegal dumping. The willingness both to recycle and to dispose to landfill depends on the relative costs of the waste collection regime, and these are dominated by the time cost of alternative disposal methods. The higher the frequency of waste collection, the less recycling and the more disposal to landfill there will be. This is because frequent collection reduces the marginal time-cost of disposal to landfill. Curbside collection of recyclable material, and the frequency of that collection, has a similar effect on the recycling rate. Although direct incentives, such as unit pricing are important in the waste disposal decision, recycling depends primarily on management of the time-costs it involves.     

Integrating Tax Distortions and Externality Theory

Tax distortions are interpreted as fiscal externalities. By purchasing a taxed commodity, the individual generates tax revenue that is a benefit external to the purchaser. Behaving noncooperatively, the individual chooses a quantity that is less than the efficient level. The excess burden is interpreted as the benefit of choosing quantities cooperatively. The analysis clarifies the difference between the marginal cost of funds and the marginal excess burden, and explains the presence of compensated demands in the Harberger Triangle, in the Index of Discouragement, and in the Ramsey Equations.     

Heterogeneous Preferences for Community Recycling Programs

This paper examines household preferences for community recycling programs, which have both public and private good dimensions. The data come from a survey conducted in Seattle (WA) which elicited stated preference-contingent ratings for different recycling programs relative to status quo, with experimental variation in the overall community recycling rate achieved and expected household cost. The recycling rate is interpreted as capturing the public benefits of recycling programs and constitutes the most common measure used by policy agencies for setting waste management objectives and evaluating policy initiatives. The analysis begins with fixed parameter models that explore different ways of handling rating data and mixed logit estimations that capture household preference heterogeneity both within and across different recycling programs. This analysis yields unique estimates of willingness to pay for an increase in the community recycling rate. Predicted individual-specific utility parameters are then regressed on household background information to explicitly examine the nature of preference heterogeneity. Overall, this paper generates interpretable policy-relevant insights into the public and private good dimensions of community recycling programs.     

Transactions Costs in Tradable Permit Markets: An Experimental Study of Pollution Market Designs

Regulators' choices of market rules and permit allocations influence tradable emission permit programs. This paper uses laboratory experiments to study how transaction costs interact with permit allocations to determine the cost-effectiveness of emissions abatement. With positive transaction costs, in theory the initial distribution of permits can affect both abatement costs and equity. Consistent with theory, we find that with declining marginal transaction costs prices deviate less from the efficient level if the misallocation of the initial permit distribution is greater, and the deviation from efficient prices does not vary with the initial permit endowment when marginal transaction costs are constant.     

The inefficiency of price quantity bargaining

In bargaining between a buyer and several sellers on prices and quantities, strategic inefficiencies arise. By reallocating quantities between agreements, the buyer can increase its share of the surplus. With two symmetric sellers producing substitutes, the quantity in the first agreement will be higher than the efficient quantity, and the quantity in the last lower, thus implying that sellers are strategically discriminated. When asymmetries are not too large and sellers produce substitutes, the buyer first agrees with the seller with the lowest marginal cost and only the most efficient order of agreement is an equilibrium outcome. When goods are complements, both equilibrium quantities are lower than the efficient levels.     

基于MFCA的废弃物回收优先排序方法及应用研究

随着资源环境问题的日益凸显,废弃物回收再利用引起了广泛关注。基于物质流成本会计（MFCA）及物质流转平衡原理,建立了将隐性成本嵌入生产工序流程的废弃物回收优先排序方法。为了验证该方法的实用性及科学性,以A钢铁企业为例进行了案例研究。结果表明：根据各工序环节的隐性成本测算结果可以确立废弃物回收优先次序,该方法能有效促进A钢铁企业环保效益与经济效益协同提升。     

我国废纸循环利用的适度水平研究

废弃物循环利用的适度水平是构建循环经济的一个重要问题。以废纸的再利用为例,在界定废纸循环利用的社会效益与社会成本的基础上,综合运用生命周期分析方法与环境影响经济评估方法识别并货币化度量废纸循环利用的边际社会效益,构建了我国废纸循环利用的边际成本函数,进而分析我国废纸循环利用的适度水平。研究结果表明,2008年我国用废纸替代木材生产1吨纸浆的社会效益为14 037元,社会福利最大化下的废纸循环利用适度水平为60.1%,高于同期国内废纸循环利用的实际水平39.5%,适当提高现阶段我国废纸循环利用的水平可以增加整个社会的福利。     

Using Non Market Valuation to Inform the Choice Between Permits and Fees in Environmental Regulation

The purpose of this short note is to open an exploration regarding the use of non market valuation to help guide the selection of economically efficient pollution control instruments. As long as non market valuation techniques can correctly estimate the slope of the marginal benefit of abatement curve, this information along with engineering cost estimates of the unit costs or slope of the marginal abatement cost will provide useful information to policy makers in choosing between fees and permits. An illustrative review of the literature suggests that both stated and revealed preference methods have estimated slopes of marginal benefit functions for reducing several pollutants. To investigate the efficiency of permits versus fees, an illustrative review of corresponding marginal abatement costs is also made. For air pollutants affecting visibility, the slope of the marginal benefit curve is far greater than the slope of the marginal abatement costs, suggesting permits as the efficient instrument. For nitrates in groundwater used for drinking, the marginal benefit curve is flatter than the rather steep marginal abatement cost, suggesting fees/taxes would be a more efficient economic instrument. We hope this note stimulates more emphasis in non market valuation on estimating the slope of the marginal benefit function to enhance environmental economists ability to make policy recommendations regarding the choice of pollution instruments for specific pollutants.      

Social Norms,Morals and Self-interest as Determinants of Pro-environment Behaviours: The Case of Household Recycling

This paper considers the role which selfish, moral and social incentives and pressures play in explaining the extent to which stated choices over pro-environment behaviours vary across individuals. The empirical context is choices over household waste contracts and recycling actions in Poland. A theoretical model is used to show how cost-based motives and the desire for a positive self and social image combine to determine the utility from alternative choices of recycling behaviour. We then describe a discrete choice experiment designed to empirically investigate the effects such drivers have on stated choices. A hybrid logit model is used to link statements over attitudes to recycling to choices, dealing with a potential endogeneity problem caused by the joint effects of un-observables on attitudes and choices. We find that a substantial share of our respondents prefer to sort their waste at home rather than in a central sorting facility. This preference is associated with a moral/intrinsic motivation, involving a belief that sorting at home is more thorough than central sorting.     

Green fiscal reform and employment: A survey

In the European debate an increase in employment is generally regarded as an important extra-dividend-in addition to improved environmental quality-from environmental taxes. The scope of this paper is to evaluate, going through the existing empirical literature, if-and to what degree-this result could be achieved through a green fiscal reform. A further goal of this paper is to assess which taxes are more efficient in terms of employment-creation when they are utilized for recycling back to the economy the revenue flowing from environmental taxes. This kind of exercise is largely different from the theoretical analysis of the double dividend issue. A large quantity of literature has grown during the recent years according to this approach, but this version of the double dividend theory will be disregarded in this paper.     

价值需求的边际欲望与边际效用及其研究意义

人对物质的价值需求是有限的,对精神的价值需求是无限的。人对价值的需求或占有实际上是一个过程,且表现出特有的规律。一是人对价值占有的边际心理欲望递增与边际效用递减的二律背反规律;二是人对价值付出的心理边际欲望递减与边际效用递减呈同向关系的规律。研究这些规律,对于增进价值包容与价值和谐,有非常重要的理论意义和现实意义。     

On the Second-best Policy of Household's Waste Recycling

This study analyzes the second-best household's waste recycling policy. If we assume the first-best economy with no illegal disposal or transaction costs, then unit pricing, an advance disposal fee and a recycling subsidy are required in order to achieve the social optimum such that both the sum of unit pricing and an advance disposal fee and the sum of unit pricing and a recycling subsidy are equal to the marginal disposal cost. Furthermore, the first-best outcome can also be obtained by a producer take-back requirement system.In the real economy, however, various factors prevent the first-best optimal outcome. In this study we consider two factors, one being the transaction cost associated with a recycling subsidy (or refund) and the other being illegal disposal by the consumer. If a recycling subsidy (or a deposit-refund system) is adopted, a transaction cost associated with it will be generated. Alternatively, if unit pricing is adopted, some of the consumed goods may be disposed of illegally. We show the complete trade-off between unit pricing and a recycling subsidy. In other words, we can not adopt unit pricing and a recycling subsidy simultaneously. As a result, there are three candidates for the second-best policy: unit pricing with an advance disposal fee, a deposit-refund system, and a producer take-back requirement system.Which of these three policies is the second-best policy will depend on the relative magnitude of the price of a recycled good and the marginal transaction cost associated with a recycling subsidy (or the refund in a deposit-refund system). Generally, if the price of a recycled good is positive and the marginal transaction cost is relatively high, unit pricing with an advance disposal fee is the second-best policy. However, where the price of a recycled good is negative and the marginal transaction cost is relatively high, a producer take-back requirement system is the second-best policy. Further, where the marginal transaction cost is relatively low, a deposit-refund system is the second-best policy, regardless of whether the price of a recycled good is positive or negative.     

Price and quantity regulation in general equilibrium

We consider a general equilibrium model with a production externality (e.g. pollution), where the regulator does not observe firm productivity shocks. We examine quantity (permit) regulation and price (tax) regulation. The quantity of permits issued by the regulator are independent of the productivity shock, since shocks are unobserved. Price regulation implies use of the regulated input is an increasing function of the productivity shock because firms take advantage of a good productivity shock by increasing input use. Thus price regulation generates higher average, but more variable, production. Therefore, we show that in general equilibrium the relative advantage of quantity versus price regulation depends not only on the slopes of marginal benefits and costs, but on general equilibrium effects such as risk aversion. The general equilibrium effects are often more important than the slopes of the marginal benefits and cost curves. In the simplest model, a reasonable risk aversion coefficient implies quantity regulation generates higher welfare regardless of the benefit function.     

Quantity versus variety: Which aspect does status-seeking promote?

We introduce status goods in a model of monopolistic competition for investigating whether a stronger preference for status promotes a higher quantity or a greater variety of status goods in equilibrium. We argue that diversification is a more likely outcome. Elasticity of marginal status is identified as the crucial factor. Under the widely adopted relative-consumption hypothesis, elasticity of marginal status equals one, which supports a higher variety. Under other hypotheses, if the status return from an extra unit of own consumption falls as others’ consumption rises, elasticity of marginal status is likely to be higher than one or not substantially smaller than one. In these reasonable patterns, diversification also tends to appear.     

Women and Minorities in Economics Textbooks: Are They Being Adequately Represented?

The author examined 12 recent editions of principles of economics textbooks to determine the quantity of race- and gender-related material. Comparing the results to earlier studies demonstrates how efforts to incorporate more such coverage within the economics curriculum have influenced economics textbooks. In general, there has been an increase in the quantitative coverage of race- and gender-related material as measured by the number of pages, names, and tables of the textbooks.     

Pricing Access to a Monopoly Input

What price should downstream entrants pay a vertically integrated incumbent monopoly for use of its assets? Courts, legislators, and regulators have at times mandated that incumbent monopolies lease assets required for the production of a retail service to entrants in efforts to increase the competitiveness of retail markets. This paper compares two rules for pricing such monopoly inputs: marginal cost pricing (MCP) and generalized efficient component pricing rule (GECPR). The GECPR is not a fixed price, but is a rule that determines the input price to be paid by the entrant from the entrant's retail price. Comparing the retail market equilibrium under MCP and GECPR, the GECPR leads to lower equilibrium retail prices. If the incumbent is less efficient than the entrant, the GECPR also leads to lower production costs than does the MCP rule. If the incumbent is more efficient than the entrant, however, conditions may exist in which MCP leads to lower production costs than does the GECPR. The analysis is carried out assuming either Bertrand competition, quantity competition, or monopolistic competition between the incumbent and entrant in the downstream market.     

Accounting for output fluctuations in manufacturing

There is a substantial body of evidence to the effect that output is more volatile than sales among manufacturing industries. Numerous explanations have been advanced to account for this excess output volatility. Some examples are pro-cyclical inventory movements induced by a stockout-avoidance motive, cost and technology shocks and decreasing marginal costs. This article assesses the contribution of these different motives to output volatility for six different manufacturing industries. Linear–quadratic models are estimated for each of the industries and then dynamic simulations are employed to determine the volatility of output when one or more of the factors are removed from the model. Technology shocks provide the most significant contribution to output volatility. The stockout-avoidance motive is also important. Cost shocks provide a very small contribution and marginal production costs are increasing at the margin and thus stabilize output. It is also shown that output volatility declines when current values of sales and material costs are assumed known rather than forecasted from prior periods’ values.