Bayesian Estimation of the Decoupling of Affluence and Waste Discharge under Spatial Correlation : Do Richer Communities Discharge More Waste?

A number of developing countries have come to face the growing problems of municipal solid waste management caused by rapid economic growth. Although there are many studies on the environmental Kuznets curve, very few address the issue of municipal solid waste, and there is still controversy concerning the validity of the waste version of the Kuznets curve hypothesis. In this paper, we provide empirical evidence in support of the waste Kuznets curve hypothesis by applying spatial econometrics methods to municipal-level data from Japan. The study finds valid evidence for the waste Kuznets curve hypothesis using the absolute decoupling method. It is demonstrated that the turning point for household municipal solid waste is approximately 3.7 million yen per person, which is far less than the maximum income in the sample. The success of our study partially stems from our highly disaggregated data and use of a spatial econometrics model that accounts for the mimicking behavior of neighboring municipalities. The former aspect indicates that distinguishing between household and business waste reveals the waste-income relationship, whereas the latter indicates the importance of peer effects when municipal governments formulate waste-reduction policies