The costs of municipal waste and recycling programs☆
Introduction
The percentage of municipal solid waste (MSW) recycled in the United States increased from 6.4% in 1960 to 32.5% in 2006 (US EPA).1 The nearly 82 million tons of materials recycled in 2006 can be attributed to 8817 municipal curbside recycling programs serving 51% of the United States population, to 10,500 drop-off programs, and to 3260 yard waste composting programs (US EPA). This growth in curbside recycling programs peaked between 1994 and 2000 when 6108 programs were initiated. Even though waste disposal costs (known as tipping fees) increased between 1980 and 2000 as landfills satisfied new state and federal guidelines, and market prices for recycled materials spiked sharply in 1995 and 1996, the empirical literature has found no causal link between these economic variables and the municipality's decision to implement curbside recycling. Instead, the increase in curbside recycling has been attributed to state mandates and local preferences for curbside recycling services (Kinnaman, 2005). The growth in curbside recycling has presumably evolved independently of costs and, perhaps for this reason, the economics literature is largely silent (with a few important exceptions) on understanding the costs of municipal waste and recycling services. Data limitations may have also hampered investigations into costs.
But both waste and recycling services are costly and require financing from local taxpayers and/or state governments to operate. This paper uses a national sample of municipal-level data to estimate the costs of municipal waste and curbside recycling services. Results suggest, perhaps unsurprisingly, that the costs to collect, separate, process, market, and transport recyclable household materials exceed the costs to collect and dispose the material as waste. Economies of scale are estimated across all observed waste quantities. But for recycling, economies of scale are estimated for only low quantities—the marginal and average cost curves for recycling take on the common U-shaped appearance.
Not all municipal waste and recycling programs are identical. The data also contain observations on local economic factor costs and program attributes. Economic variables include market prices for labor, capital, fuel, and tipping (disposal) fees. Program attributes include whether recyclable materials are separated by households prior to collection or later in a central facility, whether recycling systems are operated by municipal governments or by private firms, the size of the collection crews, the frequency of collection, and a host of other specific program attributes. Results estimate how each of these variables affect the costs of municipal waste and recycling services.
These results could help local policymakers estimate the costs and benefits of increasing or decreasing the quantity of recycled materials—where the benefits of increasing recycling include reductions in waste collection and disposal costs. Cost estimates could also be useful to a broader policymaking community interested in knowing the costs of waste and recycling services. Confusion over the private marginal cost of waste collection and disposal contributed to a recent dispute published in the Comments section of the Journal of Economic Perspectives, where researchers debated whether the private marginal cost of recycling was $80 per ton or $209 per ton (Dijkgraaf et al., 2008). Results here suggest marginal costs vary with quantity, but achieve a minimum at about $75 per ton.
Section snippets
The empirical literature on waste and recycling services
This paper contributes to two literatures—one estimating the costs of waste collection and the other estimating the costs of recycling. The literature estimating the costs of waste disposal services originated nearly 50 years ago. Early studies lacked appropriate data and therefore employed proxy variables for the quantity of waste collected and disposed. Proxies included the number of garbage trucks in operation (Hirsch, 1965, Kemper and Quigley, 1976, Collins and Downes, 1977, Petrovic and
Solid waste and recycling cost functions
Let be the quantity of solid waste collected and disposed in municipality i and be the total cost of collecting and disposing municipal solid waste. A flexible functional form for a simple cost function is given bywhere αG, , and are parameters to be estimated and represents all unobserved variables affecting the total cost of waste collection and disposal with mean zero and variance (σ2)G. The quadratic term in log output allows for
Specific determinants of the costs of curbside recycling and waste collection
Cost functions for both waste and recycling can be expanded to include other variables thought to affect the long-run marginal cost of collecting and disposing solid waste or operating a curbside recycling program. Let Zi1, Zi2, …, ZiK denote variables potentially influencing the marginal cost of operating waste or recycling systems in municipality i. The total cost function in Eq. (1) or (2) can be expanded to
Each γ determines how a change in
Summary and conclusions
This paper extends two empirical literatures measuring the costs of two municipal solid waste services by utilizing a data set of randomly selected municipalities from across the United States. Results suggest waste collection and disposal costs exceed the costs of recycling, perhaps owing to the cost of additional economic resources necessary to separate and process recyclable materials. Results also suggest economies of scale are present in both waste collection and disposal and curbside
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Cited by (0)
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The authors wish to acknowledge assistance from the following individuals and organizations: Alexandra Ellis, Matt Murray, Amy Ando, John Mayo, Jean Peretz, Bruce Tonn, Marcia Prewitt, Jonathon Bricker, The University of Tennessee Waste Management Research and Education Institute, The Joint Institute for Energy and Environment, Knoxville, TN and the U.S. Environmental Protection Agency. None of these individuals or organizations are responsible for the views expressed by the authors in this paper.