Effects of a Per-Bag Trash Collection Fee Program: Evidence from a Synthetic Control Method

Abstract

Pay As You Throw (PAYT) policies are implemented worldwide to reduce waste. This paper estimates the effects of a PAYT policy in New Taipei City—per-bag trash collection fee (PBCF) program—on households` waste disposal. Under the PBCF, people have to buy certified bags for their unsorted waste, while sorted waste (food and recyclable waste) is disposed of for free. We apply a synthetic control method that allows cities/counties to have different trends in waste disposal. The estimation results using the city/county-level administrative data suggest that the PBCF decreases unsorted waste by about 27.2% and recyclable waste by about 20.8%. Food waste almost doubles in the short term, but the magnitude gradually reduces over time. Overall, the program reduces total waste by about 17.4%. These results suggest that waste avoidance behavior resulting from the PBCF appears not only in unsorted waste but also in recycling. Finally, we estimate that the welfare gain from the PBCF is about 30,000 NTD per household per year.