Empirical Study of the Households's Production of Refuse Within the Framework of a New Consumer Theory

Abstract

The paper focuses on linking refuse (combustible solid waste) from household consumption activities to consumer behaviour and to the municipal delivery of refuse collection services. The theoretical framework used in conceptualizing the refuse disposal process and its relationship to household consumption behaviour is based on Lancaster-Muth-Becker's new approach to consumer theory. Within the framework, a household behaviour with respect to consumption activities and associated refuse is described as a utility maximization problem. The objective is a utility function over the characteristic space, where the major characteristic yielded by household's refuse disposal activity is assumed to be the cleanliness of private space. Constraints include: three sets of technological relations linking goods purchased, refuse disposed, and the characteristics produced through a collection of consumption activities, residential environment of household, and the type of municipal collection services; a budget constraint which incorporates the alternative municipal financing of service, general revenue financing and pricing of refuse; and the public production of collection service which is a function of the total amount of refuse and of tax to be collected.Data required for the estimation of technological relations were secured through survey questionaires with the random sample of 1000 households, conducted in the eight municipalities of the Tokyo Metropolitan Region during Nov. 25-Dec. 1 of 1979. These eight municipalities employ different collection services in terms of frequency of service (twice a week and thrice a week) and of site of collection (backyard and curbside). Data on residential environments of surveyee were obtained through observations of sites, pictures, and maps.Due to the difficulty of integrating the residential environmental quality into a few indices, we categorized via the use of “Hayashi's Quantification Theory” the residential environments of surveyee into five homogeneous environments. In each categorized environment, linear stochastic forms of technological relations were estimated using ordinary least squares procedures. The empirical results were utilized to evaluate the alternative municipal policies concerning the financing of collection service. The results show that the pricing scheme is preferred to customary method of general revenue financing. For the former exerts not only an income effect but also a substitution effect upon households' refuse production, while the latter exerts only an income effect.