Economic analysis of gradual “social exhaustion” of waste management capacity

This article proposes to analyze the quantitative effects of a gradual physical and “social” exhaustion of a landfill site on an equilibrium waste management service. A gradual social exhaustion of a landfill is defined here as an upward shift of a “subjective factor” associated with the amount of waste, based on the plausible hypothesis that an individual will not accept excessive presence of landfilled waste. Physical exhaustion occurs when the absolute capacity of a landfill site decreases. The paper shows some numerical examples using specific functions and parameters, and proposes appropriate directions for three policy objectives: to decrease the equilibrium waste disposal, to increase the economic surplus of the individual and/or the waste management firm, and to lower the equilibrium collection fee.