Effects of Unit-Based Pricing on Municipal Solid Waste

—Considering the Effects of the Municipal Mergers—

Abstract

This paper estimates the effects of unit-based pricing on municipal solid waste in Japan from data generated by a municipal-level panel created to examine the municipal mergers known as “the big merger of Heisei.” Previous studies had used data from a pre-merger panel due to the fact that data regarding the merged municipalities had been lost following the finalization of the mergers. In order to observe the current effects of unit-based pricing on municipal solid waste after the period of the mergers, this study has created panel data using hypothetical data from merged municipalities. It was created in order to incorporate certain data that was generated before the mergers took place. Considering the effects of municipal mergers, empirical results from the created panel data show that both simple unit-pricing and two-tiered pricing programs decreased the amount of municipal solid waste after being introduced. Moreover, the restraining effects continued over a long period of time. The restraining effects are being underestimated because the effects of these municipal mergers are not being fully taken into consideration. Results also show the mergers that were a part of ‘the big merger of Heisei’ have increased the amount of municipal solid waste.