Midnight Dumping: Public Policies and Illegal Disposal of Used Oil

Many public policies for hazardous waste raise the costs of legal disposal. Concerned about substitution of illegal disposal, economists have instead recommended policies that reward desirable waste management alternatives. This article studies the empirical determinants of dumping as reported to the U.S. Emergency Response Notification Systems (ERNS). It analyzes the frequency of used oil dumping using count-data models. The results suggest that dumping is sensitive to the cost of legal waste management options, including disposal and reuse, and to the threat of enforcement. In particular, state policies that restrict legal disposal cause substantial substitution of illegal dumping.