Price Ambivalence on the German Waste Paper Market. Stylized Facts and a Dynamic Model

14 Pages Posted: 13 Jan 2008  

Ralph Winkler

University of Bern - Department of Economics; University of Bern - Oeschger Centre for Climate Change Research

Stefan Baumgärtner

University of Freiburg - Department of Environment and Natural Resources

Date Written: April 2002

Abstract

Since 1990 the price for low quality waste paper on the German market is characterized by price ambivalence, i.e. it is at times positive and at times negative. The underlying reason is given by three institutional and technical characteristics of the market: (i) As a result of waste management laws the supply of waste paper is mostly independent of its price and its demand. (ii) Disposal of waste paper is not free but generally costly, e.g. by dumping or incineration. Alternatively, it may be used as a secondary resource in the production of new paper. (iii) The use of the secondary material as a productive input by the paper industry is technically limited. We develop a simple dynamic model of the German waste paper market compatible with the institutional and technical characteristics, and show how price ambivalence occurs.

Keywords: price ambivalence, waste paper, secondary resources, costly disposal, environmental law

JEL Classification: L73, K32, Q24

Suggested Citation

Winkler, Ralph and Baumgärtner, Stefan, Price Ambivalence on the German Waste Paper Market. Stylized Facts and a Dynamic Model (April 2002). Available at SSRN: https://ssrn.com/abstract=1082849 or http://dx.doi.org/10.2139/ssrn.1082849

Ralph Winkler (Contact Author)

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, 3001
Switzerland
+41 31 631 4508 (Phone)

HOME PAGE: http://www.ralph-winkler.de

University of Bern - Oeschger Centre for Climate Change Research ( email )

Zähringerstrasse 25
Bern, 3012
Switzerland

Stefan Baumgärtner

University of Freiburg - Department of Environment and Natural Resources ( email )

Tennebacher Str. 4
Freiburg, 79106
Germany

HOME PAGE: http://www.ere.uni-freiburg.de

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