Environmental Economics

Evaluation of the Feasibility and Economic Implications of Pricing Mechanisms in Solid Waste Management

This study analyzes the potential of pricing mechanisms in solid waste management systems. Such pricing mechanisms have been suggested as appropriate means for encouraging greater efficiency of resource use, both within the solid waste management system proper and among sources of solid wastes. The study reviews the limited empirical evidence concerning supply and demand characteristics in markets for solid waste management (primarily collection) services. The analysis of processing and disposal and ancillary solid waste management services is hampered by the diversity of existing systems, and remaining problems in the conceptual clarification of the services provided. The analysis of cost functions in the collection and transportation subsystem suggests that these cost functions are subject to variable returns to scale. For smaller communities, there are economies of scale with respect to the amount of waste handled. For large communities, scale effects vanish. The available literature provides sufficiently strong evidence for the importance of both prices (and pricing policies) and incomes as determinants of the amount of waste collected per household. This evidence is used in an exploratory numerical analysis employing decision-theoretic elements to assess the likely impact of pricing mechanisms. The analysis suggests that total system costs could be reduced through pricing mechanisms, even though there would be a tendency to rely more on self-disposal as prices for collection services increase. The study concludes with a brief suggestion for a feasible method for implementing and effective pricing mechanism in solid waste management systems.

  • Keywords

    4. Economic Incentives and Other Innovative Approaches
    4. Economic Incentives and Other Innovative Approaches - Pollution Fees/Charges/Taxes
    Environmental Media:
    c. Land
    c. Land - Solid Waste/RCRA
    Ernst, Ulrich
    EPA Project Officer/ Manager:
    Goddard, Haynes C.
    Geographic Area:
    United States
    Study Purpose:
    Empirical Application, Data Development
    Inventory Record #: EE-0373
  • Participating Organizations

    Research Organization:

    Abt Associates, Inc.Address: 55 Wheeler Street
    City: Cambridge State: MA ZIP: 02138
    Phone: Fax:
    Funding Organization:
    Environmental Protection Agency, Office of Research and Development, National Environmental Research Center, Solid and Hazardous Waste Research LaboratoryAddress:
    City: Cincinnati State: OH ZIP: 45268
    Phone: Fax:
  • Report Details
    Number of Pages:
    EPA #:
    NTIS #:
    Grant/Contract #:
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    Date Linked: 08/25/2017
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    You will need the following NTIS report #: PB239116