Does waste management policy crowd out social and moral motives for recycling?

Social and moral motivations can influence households’ decisions regarding pro-environmental behavior, such as recycling. In a theoretical framework that allows for these motivations, we analyze how policies such as unit pricing and mandatory recycling affect whether and, in the presence of heterogeneous households, the extent to which a society recycles. We show that unit pricing enhances the effect of intrinsic motivation while mandatory recycling can erode it (depending on the marginal utility of self-image and the recycling cost-to-benefit ratio). We empirically investigate the relationship between policy and intrinsic motivation, using different cutoffs for recyclers and non-recyclers, and find support for our theoretical predictions.