Partial static equilibrium model of newsprint recycling

Abstract

Estimation of the demand for old newspapers as an input to US newsprint production reveals that demand is highly price-inelastic in both the short and long run. This implies that separation and collection programmes, which lower prices in secondary markets, will not effectively stimulate recycled newsprint production. The results also indicate that policies to raise the price of woodpulp will have little impact. A slightly more effectivbe recycling policy may be tax preferences aimed at encouraging investment in newsprint capacity. The major finding is that growth in output creates an opportunity for greater old newspaper use. Thus, the most effective recycling policy will be one that promotes US newsprint production.