An Economic Analysis of the Effectiveness of Bottle Bills
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Authors
Xueyu Cheng
Chiou-nan Yeh
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Journal Article, Academic Journal
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Abstract
The first bottle bill was enacted in Oregon in 1971. Today ten states have a bottle bill requiring refundable deposits on certain beverage containers. The purpose of these bills is to encourage the reuse and recycling of beverage containers, and to discontinue the wasteful “no deposit, no return” throwaway attitude. Such attitude has created a littering problem.
Economists have been debating over the effectiveness of the bottle bills since the Oregon’s bottle bill was in place. The present paper attempts to evaluate the effectiveness of these bills. The paper provides a simple model of consumer behavior under the mandatory deposit system. Our analysis indicates that the bottle bills are highly effective. It has shown that the higher the deposit fee, the larger the number of containers returned. If the deposit fee is high enough, the consumer would return all the containers.