What does this research mean for the field?

Comparative advantage and the pollution haven effect significantly drive international waste flows, where stricter environmental regulations in origin countries relative to destinations lower trade costs for waste, and per-unit externality costs increase with income. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

Quantify how comparative advantage and the pollution haven effect shape international waste trade flows and evaluate the associated environmental externality costs.

August 31, 2026Economic InquiryOpen Access

Global waste trade: Comparative advantage, the pollution haven effect, and externality costs

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Authors

PTPrakrati ThakurRensselaer Polytechnic Institute

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Implication

Econometric analysis reveals that stricter origin regulations drive waste exports to poorer nations, highlighting asymmetric externality costs across trading partners.

Key Points

Quantify how comparative advantage and the pollution haven effect shape international waste trade flows and evaluate the associated environmental externality costs.
Constructed a Ricardian general equilibrium model incorporating waste generation, bilateral trade, and waste utilization as an industrial production input.
Analyzed bilateral trade flow, tariff, and regulatory data using an instrumental variable strategy based on meteorological pollution dispersion patterns.
A 1% increase in trade costs reduced cross-border waste trade flows by 7.0% to 29.3% across various waste categories.
Stricter environmental regulation in origin nations relative to destinations reduced bilateral trade costs by 7.0% to 77.7% for certain waste streams.
Per-unit externality costs increased with national income while net welfare gains from waste imports declined, with the pollution haven effect acting as a major contributor.

Cite This Study

Prakrati Thakur (2026) studied this question.

synapsesocial.com/papers/6a9541c8f20e493292a73ecd https://doi.org/10.1111/ecin.70086

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Implication

Econometric analysis reveals that stricter origin regulations drive waste exports to poorer nations, highlighting asymmetric externality costs across trading partners.

Global waste trade: Comparative advantage, the pollution haven effect, and externality costs

Discussion

Member takes

Implication

Key Points

Cite This Study

Global waste trade: Comparative advantage, the pollution haven effect, and externality costs

Discussion

Member takes

Implication

Key Points

Cite This Study

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