Garbage - Garbage Peter Berck 2000 Problem • Garbage...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Garbage Peter Berck 2000 Problem • Garbage isn’t free to dispose of properly, but the opportunity to illegally dispose of it, and the public health problems with non- proper disposal, make it difficult to charge for this service. – Garbage charges – Deposit refund systems – Laws Theory--consumer • r good disposed clean and for refund • c good disposed clean • x good disposed dirty • w wage • T time • L leisure • d is refundable deposit • h r h c h x the time costs of disposing of the good in the various modes • P is price of good Budget constraint • Tw = Lw + (P+d+w h c ) c + (P+w h r ) r + (P+d + wh x ) x • U(L,c+r+x, c+r) – reflects total consumption of good – taste for clear disposal. • More garbage comments • Tw = Lw + (P+d+w h c ) c + (P + wh x ) x • If we charge for garbage properly disposed of at price d (recall that the underlying good costs P), then dirty is favored over clean. • Two effects: less garbage produced and more illegal disposal General Comment • Tw = Lw + Px or (T-L)w = Px • an advalorem tax of d on x: (T-L)w = dPx • gives the same result as (T-L)w/d = Px – income tax is a tax on all goods, here there is only one good, so it is a tax on it. – income taxation already discourages consumption of environmental bads, so pigouvian taxes have less work to do. Garbage Reduction Thoughts • Value of Garbage reduction – WTP as in Hutla – Shadow price of dumping • Much higher than price because public entities set p=ac • Don’t include cost of making next dump. • However, many small dumps closed and many towns moved to commercial dumps • California 140/ton is way above numbers in Fullerton—may be because of transport costs— new dumps further away Consumer • Many deposit return situations – Beverage containers (talk about later) • Recycle for bottles (Denmark) • Recycle for cullet (Ca.) – Car batteries • Laws – No dumping of motor oil – Charge fee to dispose of properly...
View Full Document

This note was uploaded on 08/01/2008 for the course ARE 262 taught by Professor Berck during the Spring '08 term at Berkeley.

Page1 / 25

Garbage - Garbage Peter Berck 2000 Problem • Garbage...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online