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Do ‘pay as you throw’ garbage disposal systems have a positive effect on recycling?

The effect of household economics on the individual’s decision to recycle has long been a topic of debate.  While there is ample evidence that money plays a role, there is a continuing debate over using volume-based disposal fee systems (which in effect punish the household for producing more waste) versus providing a monetary incentive for recycling more.

Traditionally, garbage disposal has been a municipal activity paid for through citizens’ taxes.  The result is that the household producing ten bags of garbage per week pays the same amount as the household producing only one bag of garbage over the same time frame.  Households have no incentive to decrease their level of disposal under this financing method. 

US EPA Slideshow: Paying for Waste Disposal

For this reason the EPA promotes pay-as-you-throw (PAYT) fee systems for garbage collection (US EPA, 2009).  Under a PAYT system, users pay by volume or weight.  The more garbage a household produces, the more it pays for disposal.  “Such fees are a direct economic incentive to reduce trash and recover as much as possible” (US EPA, 1999).

Studies on the effectiveness of user fees have produced mixed results.  A 1998 study found that, “A unit pricing system does indeed motivate households to reduce the waste they choose to have landfilled (through a reduction in consumption, a shift in consumption patterns in favor of less waste intensive consumption goods, and an increase in recycling) and, ceteris paribus, is therefore potentially superior to a flat fee system” (Ferrara, 1998, p. 130). 

The downsides are that the administrative costs are higher than under a tax-based system, and the likelihood of illegal dumping increases.  In fact, one community estimated that 28 to 43% of the reduction in waste disposal observed after implementation of a PAYT system was attributable to illegal dumping rather than increased recycling (Ferrara).  Illegal dumping defers the cost of disposal to the taxpayer as the municipality will be left to clean up the mess.  However, even if only half of the reduction observed is due to diminished waste generation or increased recycling, the environmental impact is positive.

A 2006 comparison between recycling behavior in the United States and Norway also found a positive correlation between user fees and recycling rates.  The effect was much stronger in Norway than in the U.S., suggesting that effectiveness varies with societal norms (Kipperberg, 2006). 

A U.S. study in the same year found demand for garbage disposal to be largely inelastic, noting that, “To change disposal practices substantially, a household must (1) recycle little prior to the user fee and (2) face low costs to recycle such that the per-bag fee would tip the margin towards recycling” (Kinnaman, 2006, p. 226). 

Nonetheless there is ample evidence that PAYT works.  These communities reported the following results after implementation of PAYT (Canterbury & Newill, 2003):

Community      Increase in recycle rate/reduction in waste

Austin, TX              9.8% to 28.5% between 1991 and 2000

Portland, OR          9% to 35% in one year after 1992


Dover, NH               Increased recycling rate to 50%

Falmouth, ME        Immediately doubled recycling rate

                                 from 10% to 21%

Fort Collins, CO     53.5% to 79% from 1995 to 1996

The US EPA notes in its 1999 report, Cutting the waste stream in half: Community record-setters show how, that 11 of the 18 record setting communities employed PAYT schemes in their solid waste management programs (US EPA, 1999). This lends further credence to the idea that if people are forced to pay for their garbage in accordance with the volume they generate, they will produce less and recycle more.


Canterbury, J., & Newill, R. (2003). The pay-as-you-throw payoff. American City and County, 118(11), 36-40.

Ferrara, I. (1998). Essays on solid waste management: The impact of user fees. Ph.D. dissertation, York University (Canada), Canada.

Kinnaman, T. C. (2006). Examining the justification for residential recycling. Journal of Economic Perspectives, 20(4), 219-232.

Kipperberg, G. (2007). A comparison of household recycling behaviors in Norway and the United States. Environmental and Resource Economics, 36(2), 215-235.

United States Environmental Protection Agency (1999). Cutting the waste stream in half: Community record-setters show how (EPA-530-F-99-017).

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  1. Posted December 17, 2011 at 8:24 am | Permalink

    Strongly suggest adding a “google+” button for the blog!

    • lacroix01
      Posted December 17, 2011 at 1:38 pm | Permalink

      I totally agree. If you’ve been around the site you’ll see that some areas are still under construction. I hope to get all of this up and running by the New Year. Thanks for the comment, and please keep coming back.

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