Exploring Effective Incentive Design to Reduce Food Waste: A Natural Experiment of Policy Change from Community Based Charge to RFID Based Weight Charge

Abstract

This research explores the impact of the Radio Frequency Identification (RFID) Household-Based Food Waste Charging System (RHWC) on the reduction of food waste in Mapo-Gu district located in Seoul city from June 2013 to July 2016. Through comparing the amount of food waste disposal between 12 apartment complexes with the RHWC policy (treatment group) and 61 apartment complexes (control group) without the policy, we attempt to identify whether the RHWC can contribute in reducing food waste. In June 2013, all these apartment complexes adopted an apartment complex unit-based food-waste system (i.e., Community-Based Waste Charging system-CWC), but, in January 2016, the 12 apartment complexes introduced the RHWC policy, while the other 61 apartment complexes kept the CWC policy. This natural experiment setting allows us to compare the difference in the quantity of food waste disposal between these two payment policies. The RHWC uses a weight based payment design, through which each household is electronically charged for the weight of food waste they disposes, while the CWC uses a group incentive system where residents pay the same price by dividing total amount of waste charge by total number of household in apartment complex. We, relying on propensity score matching and Difference-In-Difference (PSM-DID) methodology, found a significant difference in the amount of food waste disposal between these two payment systems. Our empirical finding shows that the RHWC deign can reduce more food waste than the CWC design. This study suggests that municipalities can reduce food waste through redesigning incentive mechanism in which it is able to reduce free riding by electronically identifying and monitoring how much residents throw out thanks to RFID technology.

Reducing Food Waste in the Retail Supply Chains by Improving Efficiency of Logistics Operations

“…According to the aforementioned paper [59], RFID systems are one of several technological solutions (as well as ERP, electronic data interchange, cloud computing, and machine-to-machine) that can improve both efficiency and reduction of food waste in the FSC. For example, in [60] the authors explored the usage of RFID technology in the newly proposed household-based food waste charging system with the final aim to reduce food waste while empirically demonstrating the justification of the proposed system.…”

Systematic literature review of best practice in food waste reduction programs

“…For example, Dai et al (2015) hired paired university and local volunteers (wearing branded tabards) to door-knock community households and they delivered A2 size posters, colour leaflets, and hand sized stickers that included a message noting the ease of recycling. One study combined imposition of a tariff with a community waste bin strategy (Lee and Jung, 2017).…”

“…Four studies mentioned platforms that allowed placement of their program product (Bench et al, 2005, Dai et al, 2016, Harder and Woodard, 2009, Young et al, 2017. For example, Young et al 2017 Nineteen studies executed a promotional effort to encourage consumers to act (Lee and Kotler, 2011). The most commonly used persuasive communication efforts were informational program brochures (Bernstad, 2014, Bernstad et al, 2013, Dai et al, 2015, Devaney and Davies, 2017, Geislar, 2017, Huang et al, 2018, Jagau and Vyrastekova, 2017, Kawai and Huong, 2017, Lim et al, 2017, Linder et al, 2018, Morone et al, 2018, Nomura et al, 2011, Rousta et al, 2015, Schmidt, 2016, Shearer et al, 2017, Young et al, 2017) followed by monetary rewards including gift vouchers (Romani et al, 2018) and tokens that could be exchanged for goods (Dai et al, 2016).…”

“…As a result, there were no studies that reported strict use of the segmentation process. However, nine studies reported a targeting process of identifying the most relevant and appropriate group of individuals or households to uptake the program based on their age, region and generated food wastage (Bernstad et al, 2013, Dai et al, 2016, Dai et al, 2015, Huang et al, 2018, Kawai and Huong, 2017, Lee and Jung, 2017, Li et al, 2017, Linder et al, 2018, Shearer et al, 2017.…”

Open Innovation of James Watt and Steve Jobs: Insights for Sustainability of Economic Growth

“…Secondly, effective incentive design to reduce food waste was analyzed through a natural experiment of policy change from a community-based charge to a radio-frequency identification-based (RFID) weight charge, in relation to the RFID open innovation perspective [60,61]. Thirdly, the effect of global warming, which leads to phonological responses in the process of urbanization in the south, was analyzed in relation to the Schumpeterian dynamics of open innovation, including social innovation [9,62].…”