• Environmental and Resource Economics Review
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• v.31 no.1
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• pp.31-50
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• 2022

This paper estimates the price of standard waste bags that satisfies the polluter pays principle. Unlike previous studies, this paper suggests a method that can find new equilibrium prices using a structural relationship between the demand and cost function for the wastes. To do this, we employ the fixed-point iteration. The main findings of this paper are as follows. Assuming that the polluter pays principle is achieved at the average cost for the waste treatment, the price need to be set at a level about 3.12 times higher than the current one. The estimation result using a structural model, however, shows that the price should be set at a level four times higher than the present. This results are because the quantities reduced of the wastes make the cost per quantity of wastes due to the fixed costs increase. If applying the estimated price to the demand function, the amount of discharge of waste generated nationwide can be reduced by 10%.