Chapter 3: Household waste management: waste generation, recycling, and waste prevention
Household solid waste continues to represent a major concern to policy-makers and the public at large in the wake of the increased awareness of its environmentally detrimental effects, societal reluctance to the development of new landfills and incineration facilities, and its continued growth stemming from higher incomes, more intensive use of packaging materials and disposable goods, and increased purchases of durable material goods. Given its policy relevance, households' decisions regarding solid waste have received a great deal of attention, both theoretically and empirically. As noted in Ferrara (2008), much of the theoretical interest has focused on the negative externalities that arise in the individual decision-making over waste generation and disposal and on the implications of financing waste collection services through general taxes or flat payments to local governments or private collectors. When individuals make their consumption decisions, both in terms of how much to consume and what to consume among substitutable products that differ in their waste content, they tend to ignore that the waste they produce as a by-product of consumption contributes to the waste that accumulates over time in the landfills which, in turn, contributes to air and water pollution; they thus tend to produce and dispose of more waste than is socially optimal.
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