Examining the price incentive effect on waste generation
the volume based waste fee system in Korea
The Volume Based Waste Fee (VBWF) system aims to reduce household solid waste and encourage voluntary recycling by giving a price incentive to households. In this paper, I conduct a fixed-effect analysis to estimate the price incentive effect of the VBWF system on household waste generation. By analysing a 12-year panel data set, the results show that for a 1% increase in the average price of standard waste bags, household solid waste decreases by 0.162%. However, the estimates on recycling and illegal waste disposal do not present statistically significant results. Moreover, after dividing the samples into sub-groups, the results indicate that the price elasticity of collecting household solid waste is higher in less urbanised and rural areas than urban areas. It suggests that local governments should exploit different policy strategies depending on regional characteristics.
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