Do Not Trash the Incentive! Monetary Incentives and Waste Sorting

Abstract

In this paper, we examine whether combining non-monetary and monetary incentives increases municipal solid waste sorting. We empirically investigate this issue, exploiting the exogenous variation in waste management policies experienced during the years 1999-2008 by the 95 municipalities in the district of Treviso (Italy). Using a panel regression analysis, we estimate that pay-as-you-throw (PAYT) incentive schemes increase the sorted-to-total waste ratio by 17 percent, and that their effect reinforces that of a door-to-door (DtD) collection system, which is equal to 15.7 percent. Moreover, the panel structure of our dataset allows us to find learning and spatial effects associated with both PAYT and DtD.