Katsuya Oshima* and Yasoi Yasuda**

* Doctoral Program in Policy and Planning Sciences, Tsukuba University.
** Institute of Policy and Planning Sciences, University of Tsukuba.

+ Correspondence should be addressed to Yasoi Yasuda:
(1-1-1, Tennodai, Tsukuba, Ibaraki 305-8573 Japan)

Abstract

This is a study of a "Variable Rate Pricing Policy for Waste Management" . In our study, "The Fee System" means that residents should pay the waste management fee in proportion to the amount of waste they discard. In our theoretical analysis, from the point of view of microeconomics, we constructed a three-factor consumer behavior model made up of traditional waste management service, resource recovery service and a compound factor. We derived an ordinary demand curve of traditional waste management service and resource recovery service, by applying utility maximization theory, including a waste generation function. Next we constructed a benefit analysis method with this demand function by applying the method of welfare economics, within the cost of time for residents. As our case study location we used the Hitachi-Ohta district, Ibaraki prefecture, Japan. In the time series analysis, we derived 103 yen per capita per year as a net economic benefit in executing The Fee System in this area, from October 1992. We also showed that residents took notice of the resource recovery service. It was also shown that for the year of introduction, the city became one in which waste was easily reduced.

Key words: variable rate pricing policy for waste management, three-goods consumer behavior model, benefit analysis method, net economic benefit, price elasticity of demand.