Managing Municipal Solid Waste with Unit-Based Pricing: Policy Effects and Responsiveness to Pricing

Many municipalities across the United States have turned to unit based pricing—also known as pay as you throw (PAYT)—as a vehicle for reducing municipal solid waste generation, increasing recycling, and promoting equity in paying for the service. In this paper, we reevaluate the standard analytical methods used to examine the impact of PAYT in the literature and illustrate that econometric shortcomings may have led to underestimation of policy effects. A two-tier analytical approach to examining PAYT program effects is proposed and is demonstrated in a case study of New Hampshire municipalities. (JEL O18, Q58)