ECONOMIC-EFFICIENCY EFFECTS OF ALTERNATIVE POLICIES FOR REDUCING WASTE-DISPOSAL

Reducing the amount of municipal solid waste that is disposed of has become an important policy goal. Previous research argued that a virgin material tax offered an efficient method of meeting this goal and it continues to be considered as a policy option today. This paper demonstrates, however, that a virgin material tax is not an efficient method of reducing waste, but that an alternative policy-a combined disposal tax and reuse subsidy-is. The combined disposal tax and reuse subsidy is theoretically consistent with unit-based household charges for waste disposal, but may have advantages in some situations. © 1993 Academic Press. All rights reserved.