Research profile: Reducing Waste Through the Sharing Economy - do online platforms make a difference
When my kids were younger, I realized we didn't have one of the hallmarks of the American home: a basketball hoop. I looked on Craig's List and found one across town. My son and I borrowed a friend's pickup truck and met the nice gentleman whose grandkids were all grown up and not "shooting hoops anymore." We hauled it back and it still stands proudly in our backyard. It has withstood driving rains, games of PIG, snow, many dunk attempts, and more snow. And we will someday pass it on.
The internet and explosion of online trading and matching platforms have accelerated this kind of exchange. But is this having an absolute effect on reducing waste? This is a crucial question. World Bank data suggests waste production is going to increase globally.
Smeal College of Business' Supply Chain and Information Systems Department has consistently been ranked No. 1 as a leader in supply chain education. The department features top-ranked degree programs, world-renowned faculty expertise and research, and corporate connections with top companies and supply chain practitioners.
One of these renowned faculty is Suvrat Dhanorkar, Asst. Professor of Supply Chain Management and his research tackled the question of whether these online platforms make a difference on reducing waste. His paper "Environmental Benefits of Internet-Enabled C2C Closed-Loop Supply Chains: A Quasi-Experimental Study of Craigslist" was recently published in Management Science.
Abstract
"Recently, online matching platforms (e.g., Craigslist, FreeCycle, Gumtree) have enabled consumers to directly connect with each other to buy/sell used consumer goods (electronics, furniture, packaging, etc.) that would have otherwise ended up in the waste stream. Such matching platforms can facilitate the creation of consumer-to-consumer (C2C) closed-loop supply chains (CLSCs) for used goods, which can enhance product reuse and limit reliance on recycling and disposal alternatives. Yet, the true environmental benefits of these internet-enabled C2C CLSCs remain to be ascertained.
In this study, I use a quasi-experimental setup to examine how Craigslist’s entry into various U.S. geographic markets impacts a key environmental outcome: municipal solid waste (MSW). I assemble a data set from various disparate sources to test my hypothesis. I find that, on average, Craigslist’s entry into a geographic market results in a 2%–6% annual reduction in MSW per capita generated. I conduct a variety of robustness checks, falsification tests, and validation checks to provide support to my findings. Overall, this study provides deeper insights into the potential of online reuse platforms for the creation and coordination of C2C CLSCs. To my knowledge, this is the first study of closed-loop supply chains in a C2C context."
Suvrat Dhanorkar (2018) Environmental Benefits of Internet-Enabled C2C Closed-Loop Supply Chains: A Quasi-Experimental Study of Craigslist. Management Science