The Effect of Recycling Versus Trashing on Consumption: Theory and Experimental Evidence

Abstract

This article proposes a utilitarian model in which recycling could reduce consumers’ negative emotions from wasting resources (i.e., taking more resources than what is being consumed) and increase consumers’ positive emotions from disposing of consumed resources. The authors provide evidence for each component of the utility function using a series of choice problems and formulate hypotheses on the basis of a parsimonious utilitarian model. Experiments with real disposal behavior support the model hypotheses. The findings suggest that the positive emotions associated with recycling can overpower the negative emotions associated with wasting. As a result, consumers could use a larger amount of resources when recycling is an option, and more strikingly, this amount could go beyond the point at which their marginal consumption utility becomes zero. The authors extend the theoretical model and introduce acquisition utility and the moderating effect of the costs of recycling (financial, physical, and mental). From a policy perspective, this research argues for a better understanding of consumers’ disposal behavior to increase the effectiveness of environmental policies and campaigns.

Keywords: behavioral economics, sustainability, recycling, disposal

JEL Classification: Q20, Q50, Q53