THE DEMAND FOR SOLID-WASTE DISPOSAL

In this paper we estimate the elasticity of demand for landfill disposal of municipal solid waste using data from the Portland, Oregon metropolitan area. Efficiency losses associated with deviations from marginal cost pricing of disposal services are then derived. The efficiency losses of small deviations from long-run marginal disposal costs are not large. However, many municipalities finance solid waste services from general tax revenues, in which case waste generators effectively face zero marginal costs. Here, the efficiency losses are much larger, indicating that communities would benefit from introducing volume or weight-based pricing.