Health status and willingness-to-pay estimates for the benefits of improved recycling rates: evidence from Great Britain

Waste management is a challenging task around the globe. Waste disposal and recycling have important implications, not only for environmental preservation, but also for the public health, well-being, the economy and sustainable development. However, little is known about the impact of the recycling rates on public health and the willingness to pay to increase recycling. The aim of this study was to examine the relationship among household income, recycling rates and health status and to estimate the marginal willingness-to-pay (MWTP) in Great Britain. The empirical analysis relied on data from the British Household Panel Survey (BHPS) over the period 1999–2009. We estimated the impact of recycling rates and income on health status and we calculated the monetary value for a unit increase in recycling. To solve for the endogeneity issues, coming from possible reverse causality and omitted-variable bias, we implemented two instrumental variables (IV) approaches. First, we applied the Two-Stage Least Squares (2SLS) and second, we estimated a Pooled Ordered Probit model. We found that for one percent increase in recycling rates, the average MWTP was estimated between £290 and £340 per annum. Furthermore, our results show that other determinants play an additional significant role on health status, such as the employment and marital status, the age, education level and meteorological conditions. While the study provides insights about the MWTP, future studies regarding the costs of providing recycling services may offer additional useful information to help the policy makers in the decision-making process.