It Wasn't Me! Visibility and Free Riding in Waste Disposal

We study the effect of visibility of individual action on free riding using field data on household waste sorting. In our sample households pay an annual fee proportional to the number of emptyings of their bin for unsorted waste. We exploit the variation in the bin sharing policy to estimate the production of unsorted waste when bins are shared or not. We find that unsorted waste production is lower when two households share the same bin compared to households not sharing the bin. This result does not hold when more than two households share the same bin, possibly due to lack of visibility of the individual action. We interpret this evidence as suggesting that peer monitoring can promote virtuous behavior when monetary incentives cannot be used to solve social dilemmas.