Behavioural Economics for Environmental Policy: Lessons from Salience, Status-Quo Bias, and the Power of Social Norms in Curbside Recycling Programs

Abstract

The point of focus in this paper is the potential role of behavioural economics in environmental policy. Using the case study of curbside household recycling programs, the general hypothesis presented is that behavioural factors can provide a more complete account of the sustained increase in curbside recycling program utilization by households than can neo-classical conceptions supply and demand. Although there are many behavioural factors that have been identified in the field, the focus will be on the three behavioural factors of salience, status-quo bias, and social norms. First presenting a theoretical comparison of economic actors as Homo Economicus and Homo Sapiens, the paper explores the potential of behavioural economic factors to explain the increased utilization of curbside recycling programs. The findings of the various studies that are surveyed throughout the paper are then integrated to suggest behavioural approaches to improve curbside recycling and composting programs. The findings further show that behavioural approaches using salience, status-quo bias, and social norms should be combined with conventional environmental policy approaches to improve the overall effectiveness of environmental programs, particularly those that address negative environmental externalities which result from otherwise common and non-salient human behaviour.