Municipalities introduced unit-based pricing (UBP) with the aim of achieving a decrease in household waste generation and for the replacement of unsorted waste with recycling. Although many studies have shown that UBP has a short-run effect on recycling, few works have tackled the long-run effect on waste generation and recycling. By using panel data for 665 Japanese cities over 8 years, we examine the long-run effect of UBP on waste generation and recycling. The estimation results in waste generation suggest that there is a rebound effect, though a small one. We confirm that the effect of UBP on recycling sustains for the long run. We also find that the short-and long-run responses to an economic incentive for recycling activities differ with income groups. Recycling among the high-income group has not been promoted by implementation of UBP, but people in that group are willing to participate in recycling without an economic incentive. In contrast, recycling activity within the low-income group is strongly motivated by UBP for many years.JEL classification: R20, Q53, Q58

This article examines the reducing and recycling effects caused by municipal solid waste policies, such as garbage pricing and recyclables collection. Equations for garbage and recyclables are estimated using Heckman's two-step estimation and seemingly unrelated regression (SUR) to consider sample selection bias and the correlation between garbage and recyclables emission. The estimation results suggest that municipal PET bottle collection leads to a reduction in the amount of garbage collected. Furthermore, the results reveal that garbage pricing increases the quantity of PET bottles collected, while it decreases the amount of garbage.

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Due to the fact that few studies analyzing cost structure of municipal solid waste in Japan, we argue the cost structure using five years of MSW panel data. Estimation results showed that landfill costs could be reduced if treatment is set up for wider municipal areas rather than just one municipality at a time. It was also found that cost saving will occur if a separate collection for paper containers is established, rather than disposing of these as burnable waste, as is currently being done.

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