Association for Public Policy Analysis & Management

The unit-pricing system started to be prevalent in the U.S. in the 1990s. Researchers have indicated that the system was effective in the U.S. However, little research has been done on this topic worldwide, especially in Asia. This paper estimates the effect of the unit-pricing system - bag program which has been implemented in districts of New Taipei City, Taiwan, since 2008. This program was phased in in several stages: advertising, implementation, and enforcement. People were firstly encouraged to use the certified garbage bags from advertising in several ways, such as distributed fliers, freebies or lotteries when using the garbage bags. Then, the program was formally implemented by asking citizens to discard their waste in garbage trucks with the bags, and citizens were refused service if bags were not used. Lastly, the government imposed a fine up to around $200 USD on those who illegally dump their waste curbside without using the bags.

We use district-level monthly panel data of household waste from July 2007 to December 2011 from the Environmental Protection Department, New Taipei City Government. The data covers one year before the first district implemented program and one year after all the 29 districts implemented the program in New Taipei City. We use district fixed effects to control for district time-invariant characteristics and time fixed effects to control for the time trends. We additionally add lagged dependent variables in one of our model specifications to alleviate the auto-correlation issue of the long panel.

Our results demonstrate that the per capita household waste was significantly reduced by around 7 kilograms (15 pounds) each month after program implementation, which was almost 50% of the original amount. The implementation of the program was effective enough even without imposing a fine. However, we do not find a significant increase in per capita household recycling, which is seen as one kind of transfers of the reduced waste. This could be because the recycling program had been implemented in New Taipei city before the adoption of the garbage bag program, and thus the effect on recycling was limited. Our study suggests that Asian cities, especially those in Taiwan, could consider adopting the unit-pricing bag program as an impetus for households to reduce wastes.

The contribution of this study is threefold. First, it provides evidence of the effect of the unit-pricing program in Asia, which is less known in the literature. Second, this paper is the first research of this kind that examines the effect of different program stages. Policy makers could understand the effectiveness of the program tools and choose the suitable one to adopt accordingly. Third, another four cities in Taiwan are planning to implement the garbage bag program. Our research will provide evidence of the program effect for decision makers in these cities as reference before they adopt the program.