UW-Madison UW-Madison

Staff Paper No. 370 - Abstract

The Economically Efficient Rate of Waste Disposal in a Landfill: An Application to Rusk County, Wisconsin

Christopher T. Behr
Robert W. Provencher [rwproven@wisc.edu]

Staff Paper No. 370, March 1994, 11p.


In most communities residents do not face the marginal cost of waste disposal. Instead they pay annual fixed fees for disposal services, usually in the form of property taxes. According to standard economic theory the result isthat residents generate too much waste. Although some communities recently have implemented marginal cost pricing programs in which residents are charged for their waste disposal on a volume or weight basis, such programs generally ignore the user cost of disposal. In this paper, a user cost pricing policy for landfill space is analyzed using dynamic programming. Numerical results for a proposed Rusk County landfill show positive, rising user costs over the landfill's life that if incorporated into the marginal cost pricing of waste disposal would generate welfare gains over alternative pricing policies. Additional analysis reveals that the potential gain of a user cost pricing policy is greatest for communities where landfill space is relatively scarce.
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Last updated on Thu, Jun 2, 2005 1:34pm