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[greenyes] Jeff Morris' Elasticity Data
Jeff-

    You outlined the upcoming results from your King County econometric
study which found, if I understand you correctly, that there is some but not
much price sensitivity (or the inclination to change disposal habits in
response to increases in the cost of disposal) among households in the
Pacific Northwest to small changes in the price of garbage collection.

    I haven't seen the full report -- albeit I am very eager to do so -- but
I would hazard a guess that, to convert decimal places to words, that you
were measuring short term, and not long term, price sensitivity.

    I raise this point for the listserve because that distinction is of
major policy importance to many of us in our work. To understand why, it
should be recognized that short term behavioral changes are generally
limited to alternative actions to disposal price increases based upon what
is presently out there in the market.

    Thus, here that means that the only easy alternative response to a trash
collection price hike for someone already recycling fairly well -- to
exaggerate a point -- is to scrape the bird poop off their used newspapers
at the bottom of their canary's cage so that that soiled paper can be
recycled.

    In any event, there's not much near-in opportunities to move discards
out of the disposal stream from a base of a successful recycling program. In
much of Madison, for example, which I know more about from doing our own
measurements, there are 95-99% participation rates calculated on an 8 week
cycle, and very good capture rates, as well, so where does one go from there
without a big reach to physically drive RMP, for example, that's not yet
part of the City's program, to the buy back center every week.)

    On the other hand, if disposal prices increase for a sustained period,
there can come a cross-over point in which the cost to move up the diversion
ladder to the next plateau is offset by the avoided higher tip fees at the
landfill, such as curbside composting service for food scraps and
unrecovered paper that constitutes, nationally, almost 2/3 of that which
continues to be landfilled after current recycling efforts.  Adding that
expanded recycling service, while
it may be more expensive for the city today, would not tomorrow in a world
with those higher dump costs. That is to say, long term price changes, that
do not directly alter people's behavior, can, at the same time, make it
economically possible for the intermediating collection programs to expand,
that create new near-in alternative opportunities for homeowners. Yet none
of these latent transformative events will show in short term elasticities.

    And were that point reached so that the County or municipalities were to
add curbside compost service, people would be even more willing to
voluntarily comply with that, and recovery rates would more than double
from, perhaps, a doubling of tip fees, for a -1.00 elasticity value.

    It is for these reasons that I think those of us looking at policy
opportunities for quantum leaps should focus on where those cross-over
points lie, that works on long term elasticity precepts, not on short term
elasticities, interesting though those may be.

    Please do let everyone know when your report is released and how to find
it on the web. Anything that elaborates on people's behavior with concrete
data adds insights on how we can do our jobs more effectively.

                                                        Peter






______________________________
Peter Anderson
RECYCLEWORLDS CONSULTING Corp
4513 Vernon Blvd. Suite 15
Madison, WI 53705
Ph:    (608) 231-1100
Fax:   (608) 233-0011
Cell    (608) 438-9062
email: anderson@no.address







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