Environmental Responsibility: Impact of Waste-Sorting Regulation on Secondary Market

Proper waste disposal in an environmentally friendly manner is crucial for protecting both ecosystems and public health. Among various policy tools, waste-sorting regulations and the growth of secondary markets—where consumers resell used goods—offer promising solutions for more sustainable waste management. However, how such regulations affect secondary markets remains unclear, as user motivations and convenience differ from those in the primary market. In this paper, we address this question through a natural experiment: the 2019 implementation of mandatory waste-sorting regulations in Shanghai. Using data on over 362 million resale listings from a leading online platform, we examine the policy’s impact on both resale listings and purchase volume. We employ the synthetic control method to construct a comparable control group and use difference-in-differences to estimate the policy’s impact. We find no significant change in overall resale listings. However, among environmentally responsible younger users, resale listings decrease by 8.43% and purchase volume declines by 1.95%. The effect is particularly pronounced for easily discarded goods and inactive users. Our findings reveal a trade-off: although regulations encourage responsible disposal, they may also unintentionally discourage reuse.

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Publication Details

Journal
Service Science
Published
2025-12-23
DOI
https://doi.org/10.1287/serv.2025.0077
Primary Topic
Municipal Solid Waste Management
Type
article
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article

Environmental Responsibility: Impact of Waste-Sorting Regulation on Secondary Market

Ruomeng Cui, Huan Xu, Qiang Li
Service Science
Municipal Solid Waste Management
article

Environmental Responsibility: Impact of Waste-Sorting Regulation on Secondary Market

Ruomeng Cui, Huan Xu, Qiang Li
article en

Abstract

Proper waste disposal in an environmentally friendly manner is crucial for protecting both ecosystems and public health. Among various policy tools, waste-sorting regulations and the growth of secondary markets—where consumers resell used goods—offer promising solutions for more sustainable waste management. However, how such regulations affect secondary markets remains unclear, as user motivations and convenience differ from those in the primary market. In this paper, we address this question through a natural experiment: the 2019 implementation of mandatory waste-sorting regulations in Shanghai. Using data on over 362 million resale listings from a leading online platform, we examine the policy’s impact on both resale listings and purchase volume. We employ the synthetic control method to construct a comparable control group and use difference-in-differences to estimate the policy’s impact. We find no significant change in overall resale listings. However, among environmentally responsible younger users, resale listings decrease by 8.43% and purchase volume declines by 1.95%. The effect is particularly pronounced for easily discarded goods and inactive users. Our findings reveal a trade-off: although regulations encourage responsible disposal, they may also unintentionally discourage reuse.

Service ScienceVol. 18(1)
Emory University (US), Shanghai Jiao Tong University (CN), Wilfrid Laurier University (CA)
Responsible consumption and production
Openalex Percentile: Top 38%
Municipal Solid Waste Management
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Environmental Responsibility: Impact of Waste-Sorting Regulation on Secondary Market — Ruomeng Cui, Huan Xu, et al. · Service Science (2025) | TGRS Research Map | TGRS