An econometric analysis of paper and wastepaper markets

Abstract

The U.S. Federal government and many state governments have developed policies to encourage the recycling of wastepaper. In order to examine the effectiveness and efficiency of these policies the present paper does three things. First, we describe the U.S. market for wastepaper, with particular attention to price behavior. Second, we calculate recycling rates, and note that despite wide swings in price, recycling rates have changed little. Last we estimate an econometric model of paper and wastepaper markets to calculate price elasticities of supply and demand. We find these elasticities to be very small. This finding calls into question the effectiveness of government policy.