Understanding how consumers make recycling decisions is crucial in crafting sustainable recycling policies. We estimate consumer preferences and willingness to pay for current beverage container recycling methods, including curbside pick-up services, drop-off at government-subsidized recycling centers, and drop-off at non-subsidized centers. Using a representative online and telephone survey of California households, we estimate a discrete choice model that identifies the key attributes explaining consumers' beverage container disposal decisions: the refund amount (paid to consumers only if they recycle at drop-off centers), the volume of recyclable material generated by the household, and the effort associated with bringing recyclable materials to recycling centers. Additionally, we use counterfactual policy analysis to show that increasing the refund amount increases overall recycling rates, with the largest changes in consumer surplus accruing to inframarginal consumers, who are on the boundary between taking containers to recycling centers and recycling using curbside pick-up, namely white and higher income consumers. Conversely, we show that eliminating government-subsidized drop-off centers does not significantly alter consumer surplus for any major demographic group, and has little impact on recycling rates.
Author Bio: Sofia Berto Villas-Boas is a professor in the Department of Agricultural and Resource Economics at the University of California, Berkeley. She holds Class of 1934 Robert Gordon Sproul Chair in Agricultural Economics. Born in Portugal in 1971, she received her Ph.D. in Economics from U.C. Berkeley in May 2002. Her research interests include industrial organization, consumer behavior, food policy, and environmental regulation. Her recent empirical work estimates the effects of policies on consumer behavior, such as a bottled water tax, a plastic bag ban, and a soda tax campaign and its implementation. Other published work has focused on the economics behind wholesale price discrimination banning legislation, contractual relationships along a vertical supply chain, and identifying the role of those contracts in explaining pass-through of cost shocks along the supply chain into retail prices that consumers face.