Landfill Closure and Housing Values

The United States disposes roughly 60% of the municipal solid waste it generates each year in solid waste disposal facilities, commonly known as landfills. Hedonic pricing studies have estimated the external costs of landfills on neighboring housing markets, but the literature is silent on what happens to property values after the landfill closes. Original housing price data collected both before and after a landfill closure are used to estimate how a landfill closure affects neighboring property values. Results of both a hedonic pricing model and repeat-sales estimator are used in the analysis.

Why do Municipalities Recycle?

The disposal of municipal solid waste is believed to emit foul odor, threaten groundwater, and increase road congestion. As remote regional landfills have replaced local town dumps, these costs are no longer internalized by garbage-producing households or their municipalities. Instead, rural property owners located adjacent to large regional landfills and along the roadways accessing those landfills bear the external costs of garbage disposal. This paper uses a comprehensive nine-year panel data set of aggregated state data to empirically examine why 8,937 municipalities continue to operate costly recycling programs designed to reduce the external costs of garbage disposal. Results suggest that local tastes for recycling drive municipal decisions. If household preferences for recycling are short lived, then we can expect a future decrease in the number of municipal recycling programs. Recent data indicate the number of recycling programs in operation in the U.S. has indeed fallen.

Determining the Socially Optimal Recycling Rate

What municipal recycling rate is socially optimal? One credible answer would consider the recycling rate that minimizes the overall social costs of managing municipal waste. Such social costs are comprised of all budgetary costs and revenues associated with operating municipal waste and recycling programs, all costs to recycling households associated with preparing and storing recyclable materials for collection, all external disposal costs associated with waste disposed at landfills or incinerators, and all external benefits associated with the provision of recycled materials that foster environmentally efficient production processes. This paper discusses how to estimate these four components of social cost to then estimate the optimal recycling rate. (C) 2013 Elsevier B.V. All rights reserved.