Garbage and recycling with endogenous local policy

This paper estimates the impact of garbage fees and curbside recycling programs on garbage and recycling amounts. Without correction for endogenous policy, a price per bag of garbage has a negative effect on garbage and a positive cross-price effect on recycling. Correction for endogenous local policy increases the effect of the user fee on garbage and the effect of curbside recycling collection on recycling. Introducing a fee of $1 per hag is estimated to reduce garbage by 412 pounds per person per year (44%), but to increase recycling by only 30 pounds per person per year. (C) 2000 Academic Press.