The economics of household packaging waste : norms, effectiveness and policy design

Abstract: This thesis consists of an introduction and four self-contained papers, which all deal with the economic effectiveness of the Swedish producer responsibility for packaging materials. Paper I analyzes the determinants of household packaging recycling efforts in Sweden by employing data on households' self-reported behavior. This is analyzed in an ordered probit regression framework. Theoretically the paper draws heavily on recent developments in the literature on integrating norm-motivated behavior into neoclassical consumer theory. The results show that both economic and moral motivations are important in explaining household recycling outcomes. This indicates that recycling campaigns could be effective in increasing recycling efforts, not the least by influencing individuals' perceptions about others' (positive) contributions in the recycling field. The results also indicate that the importance of moral motivation partly diminishes if improved collection infrastructure makes it easier for house-holds to recycle. Paper II investigates the main determinants of collection rates of household plastic packaging waste across Swedish municipalities. This is done by the use of a regression analysis based on cross-sectional data for 252 Swedish municipalities. The results suggest that local policy measures, geographic/demographic variables, socio-economic factors as well as environmental preferences all help explain inter-municipality collection rates. For instance, the collection rate appears to be positively affected by increases in the unemployment rate, the share of private houses, and the presence of immigrants (unless newly arrived) in the municipality. The impacts on collection outcomes of differences in distance to recycling industry, urbanization rate and population density turn out, though, both statistically and economically insignificant. This implies that the plastic packaging collection in Sweden may be performed cost-ineffectively. Finally, the analysis also shows that municipalities that employ weight- based waste collection fees overall experience higher collection rates than those municipalities in which flat and/or volume-based fees are used. Paper III extends the analysis in Paper II primarily by: (a) adding 30 more municipalities; (b) including additional data on local policy variables; and (c) adopting spatial econometric methods. The empirical results suggest that the collection of plastic packaging is positively related to collection in neighboring municipalities. The analysis also shows that municipalities that employ weight-based waste fees generally experience higher collection rates than those municipalities in which volume-based fees are used. The presence of curbside recycling and a high intensity of recycling drop-off stations also provide important explanations for why some municipalities perform better than others. Paper III also confirm the finding from paper II that the plastic packing collection in Sweden seems to be conducted in a cost-ineffective manner. Finally, Paper IV analyzes the incentive structure and the cost-effectiveness of the Swedish producer responsibility ordinance. A secondary purpose is to discuss if the empirical evidence in any way suggests that an alternative supply chain management regime, i.e., the UCTS system, could be more effective. According to the results, both the Swedish producer responsibility scheme and the UCTS system give rise to output and input substitution effects. However, none of the systems tends to encourage enough of design for recyclability. The analysis of the transformation and transaction costs involved in the two waste management systems suggests that it is hard to a priori determine which system will minimize waste management costs. This will depend on, for instance, households' valuation of sorting efforts and the presence of economies of scale in the waste collection system. The above also suggests that different systems can be preferred in different parts of the country, and that the cost-effectiveness of the Swedish packaging collection scheme could be improved.