The effects of unit pricing system upon household solid waste management: The Korean experience

Initial effects of adoption of a unit pricing system paired with aggressive recycling programmes appear to be substantial. This paper explores the impact of price incentives under the unit pricing system on household solid waste generation and recycling in Korea. We employ a simultaneous equation model considering the feedback effects between total waste generation and recycling. Estimation results using 3017 Korean household survey data indicate that a rise in waste collection fee induces households to recycle more wastes. However, this effect is partially offset by decreases in source-reduction efforts due to the feedback effects, resulting in relatively lower price elasticity of demand for solid waste collection services. This implies that household demand for solid waste collection services will not decrease much with additional increases in the collection fee, unless further recycling incentives such as more frequent recyclable pickup services are accompanied.