Freakonomics and Pay-As-You-Throw

The latest podcast on Freakonomics radio discusses the stigma, culture and psychology of trash.  In addition to short pieces on the strange journey of the Mobro 4000 garbage barge and Taipei’s  participatory curbside pick-up, host Stephen Dubner reports on the recent boom in “Pay-As-You-Throw” (PAYT) trash plans that charge households for garbage collection depending on how much they throw out.  Garbage collection has never been free—only bundled in with property taxes or other municipal bills—but PAYT explicitly charges a fee on each bag of garbage a household produces ($1.50 for a 33 gallon bag in Grafton, Massachusetts, for example).  The aim is to incentivize recycling, donation, composting and waste reduction, as well as trickle-up concern for limited packaging from consumers to manufacturers.  Money garnered from the sale of new price-marked trash bags also provides revenue for the city.

Clever disincentives, however, can lead to unintentional consequences.  Sanford, Maine actually dumped PAYT soon after implementing it: the law resulted in an uptick in illegal dumping and burning trash, to avoid payment.  The model is not without its complications.

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