摘要:Several studies have shown the efficiency of both a Pigovian tax on waste disposal and adeposit-refund instrument, that is a combined output tax and recycling subsidy. Theefficiency of these instruments, however, critically depends on households being paid forrecycling. In reality, although most households have access to curbside recycling services,they are not paid for the items they set out at the curb. All items placed in a recycling bin arethus of equal value to a household, and there is no incentive for producers to make theirproducts any more recyclable than what is necessary to be eligible for the bin. This papercharacterizes the constrained (second-best) optimum that exists with the missing recyclingmarket and solves for a modified deposit-refund instrument that will achieve the constrainedoptimum.