Recycling behavior of private households: an empirical investigation of individual preferences in a club good experiment

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Abstract

While recycling helps to limit the use of primary resources, it also requires considerable technological investments in regional circular flow systems. The effectiveness of recycling systems, however, also depends on household behavior. Therefore, current research increasingly focuses on behavioral and psychological theories of altruism, moral behavior, and social preferences. From an economic perspective, recycling systems can be understood as public goods with contributions resulting in positive externalities. In this context, the literature shows that recycling behavior highly depends on the perception of how others behave. In neutrally framed public good experiments, contributions tend to increase when alternative public goods are offered and group identity is generated. We aim to contribute to this discussion by observing household behavior concerning recycling opportunities in controlled settings. For this purpose, we study a laboratory experiment in which individuals contribute to recycling systems: At first, only one public recycling system (public good) is offered. After dividing societies into two clubs, “high” and “low” according to their environmental attitudes, excludable club systems (club goods) are added as alternative recycling options for each club. The results of our pilot experiment show that adding a more exclusive recycling club option increases individual contributions to recycling compared with a pure public good framework. However, this increase in cooperation is only significant for those clubs where members with higher environmental attitudes are pooled.

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