Does Craigslist Reduce Waste? Evidence from California and Florida

- Economic theory suggests that online platforms can reduce material throughput.
- Craigslist's impact on waste is estimated empirically using a fixed-effects model.
- Craigslist seems to have cut daily per capita waste by about a third of a pound.
- The econometric estimates are imprecise but robust to a range of specifications.
- Analysis of the weight of items posted on Craigslist shows results are plausible.

There is much discussion but little research on the environmental impacts of online platforms associated with the sharing economy. Economic theory suggests that falling transaction costs in secondhand markets increase incentives for people to exchange rather than discard used goods. This paper uses difference-in-difference methods to estimate Craigslist's effect on solid waste by exploiting a natural experiment in how the platform expanded across California and Florida. The econometric results suggest that Craigslist reduced daily per capita solid waste generation by about one third of a pound, though the estimates are not very precise. A plausibility analysis of the weight of items posted on Craigslist concludes that the 200 million annual for-sale posts created by Californians and Floridians can reasonably account for waste reductions of roughly this magnitude.