A ridge regression approach to estimate the relationship between landfill taxation and waste collection and disposal in England. (15th June 2021)

• Record Type: Journal Article
• Authors: Panzone, Luca; Ulph, Alistair; Areal, Francisco; Grippo, Valeria
• Is Part Of: Waste management. Volume 129(2021)
• Page Start: 95
• Page End: 110
• Publication Date: 2021-06-15
• Subjects: Household Waste -- Landfill Tax -- Ridge regression -- Local authority -- Panel data; Hazardous wastes -- Periodicals; Refuse and refuse disposal -- Periodicals; 363.728
• DOI: 10.1016/j.wasman.2021.04.054
• Languages: English
• ISSNs: 0956-053X

Abstract

Highlights: Household waste production is characterised by externalities and market failure. This article tests the effect of landfill taxes on waste collection and disposal. We use a panel of English local authorities over 9 years. We estimate the landfill tax elasticity of waste for a range of waste streams. The landfill tax is effective in shifting waste from landfill its alternatives. Abstract: The production of household waste is characterised by externalities and market failure, where the decision to consume does not consider the environmental impact of consequent waste generated. Policy interventions in the UK have focused primarily on pricing the disposal of waste through a landfill tax. This article tests the effectiveness of landfill taxation on household waste collection and disposal. Using a ridge regression with correction for fixed effects on a panel dataset of English local authorities, we estimate the landfill tax elasticity of waste for a range of waste disposal and collection streams. Results indicate that the landfill tax is elastic at disposal and effective in shifting waste from landfills to incineration. The tax is inelastic at collection, and encourages recycling. Our results indicate that landfill taxation is an important tool to change how waste is disposed by households and local authorities.