Optimal pricing of depletable, replaceable resources: The case of landfill tipping fees

Mark J. Ready, Richard C Ready

Research output: Contribution to journalArticlepeer-review

34 Scopus citations

Abstract

We develop a general model for pricing a depletable, replaceable asset, and discuss its application in determining optimal tipping fees for a sanitary landfill. We show that the optimal fee includes a component that grows at the real interest rate as space in the landfill is depleted, and then drops when a new landfill is built. Because the scarcity cost of landfill space increases as the landfill is filled, it may be optimal to delay a waste reduction program (such as recycling, composting, or incineration) until the landfill is partially full.

Original languageEnglish (US)
Pages (from-to)307-323
Number of pages17
JournalJournal of Environmental Economics and Management
Volume28
Issue number3
DOIs
StatePublished - Jan 1 1995

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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