Pay as you throw: evidence on the incentive to recycle

The Pay as you throw (PAYT) system implies that people pay according to the unsorted waste they produce. Its impact has been studied with mixed results on total waste and recycling because the estimates refer to different socio-economic contexts and so do not take into account all time-varying effects of unobservables. A way out of this problem is to use the Synthetic Control Method (SCM), which is a data driven impact evaluation. In particular, in our work we apply the SCM to the municipality of Ferrara where users pay a fee up to a given number of bags produced, after this number they are charged for every additional bag. We test the impact of the introduction of this system in the municipality of Ferrara in July 2017, by using a sample of municipalities of the same region served by the same firm. We find that the introduction of the new tariff strongly increased waste recycling and strongly decreased Ferrara’s total waste with respect to its synthetic counterfactual. In fact, after one year of the implementation of the new tariff, Ferrara has increased its waste recycling percentage of total waste by 40% and decreased the total per capita waste by 30% with respect to what its synthetic counterfactual has done.