2011/8/10 Report No：11-07
Although there are many studies on the environmental Kuznets curve, very few of them address municipal solid waste cases, and there is still controversy concerning the validity of the waste Kuznets curve hypothesis. In this paper, we provide empirical evidence for the waste Kuznets curve hypothesis by applying spatial econometrics methods to municipal-level data in Japan. To our knowledge, this is the first study that finds valid evidence for the waste Kuznets curve hypothesis in the absolute decoupling manner. The successful result owes in part to our highly disaggregated data and also to the use of a spatial econometric model that takes into account the mimicking behavior among neighboring municipalities. The former indicates that distinguishing between household and business waste is the key to revealing the waste–income relationship, while the latter implies the importance of peer effects when municipal governments formulate waste-reduction policies.