I’m having trouble with this one:
“Think outside the box. Residents of your city are charged a fixed weekly fee of $6 for refuse collection. They are allowed to put out as many cans as they wish. The average household disposes of three cans per week in this way. Now suppose that your city changes to a “tag” system with no fixed weekly fee. Each can of refuse to be collected must have a tag affixed to it. The tags cost $2 each, and households can purchase as few or as many tags as they want. What effect do you think the introduction of a tag system will have on the total quantity of trash collected in your city?”
It will create vast amounts of litter (what do garbage collectors do if the tag is absent? Leave the trash where it is to gradually scatter and/or be scavenged by raccoons?)
Also, those citizens who use the tags will attempt to pack their garbage more densely to take fewer cans. Thevolume may go down, a little, but the mass of garbage should remain the same. Plus the city will get workman’s comp claims from collectors who throw their backs out (no pun intended) trying to lift a 95lb trashbin. Net savings? At best, slight.
Funny, the $2 a tag per bag system is what my town just switched over to. What effect did it have on our trash? None. It is trash. You have to get rid of it. Should we scatter it over our lawn lawn so we can avoid an extra $2 if we put out 4 bags one week? I don’t see how this is really an economics problem at all. It is a change in the tax structure on an essential. Within reason, this should have no effect at all except to distribute the costs more fairly according to usage.
I should also add that I live in a very historical, relatively affluent town where people take their homes and common grounds very seriously. If someone did not put the appropriate tags on their garbage and it got scattered, there would be immediate social pressure to pick it up and get the right tags on it for the next week. Leaving it around is simply not an option.
I can also see what Bryan Ekers has described happening in my urban, poorer communities. People would try to put trash in open dumpsters or simply throw it out in front of someone else’s house.
I hope that this is the expected answer. Many times, economics courses think that everything can be explained in economics terms when pschological and sociological factors are often much more powerful in the real world.
If there are also recycling bins that are free, then what I expect to happen is that more people recycle and try to put out less trash. They will also try to compact their trash. There will be a learning curve for what can be recycled, especially if the recyclers refuse what cannot be recycled (as they should). Eventually, people will get used to it. Who knows, they might even make pressure for less useless packaging material.
speaking from an economics point of view, this is a supply and demand question with the quanity of trash to be disposed of to be a fairly inelastic good. the average household will dispose of the same amount of trash, because their utiltiy from 3 cans and paying 6$ is the same as it was before. People with more trash will probably pay the extra money and people with less trash will pay less, depending on the class of the neghboorhood (rich people buy more stuff and therefore have more trash) the amount the city collect will either go up or down. Social implications like packing cans and finding other ways to dispose of trash would surely happen but they can not be predicted economically as far as I can tell.
Won’t people buy the tags in bulk, based on the average? So if they know they usually have 3 cans a week for 52 weeks, won’t they just go buy that many? This would still work out to the same amount of money… ((3x2)x52 vs. 6x52)
Shagnasty, what do you do? Certainlly you don’t count your trash the night before pickup and run to city hall to buy your tags, do you?
Over time, however, people might realize they always seem to have a few tags left over at the end of the year and buy for the next year based on the previous year, but it certainlly wouldn’t have a grand effect on how many bags are put out…