This article tests two major theories of consumer preference relevant to mandatory beverage container deposit legislation (MBCDL). It examines these theories in the context of market performance of the beverage industry as well as socioeconomic and environment issues. In an area where used beverage containers may be conceptualized as negative externalities or market failures, control of such containers can become the focus of public policy both to adjust private prices and to achieve the social goal of a litter-free environment. Six hypotheses were formulated to test these theories, and empirical data on per capita beer consumption in twenty-two states were used to test the effects of MBCDL on one of the hypotheses. The findings indicate that MBCDL appears to have an enduring negative effect on beer consumption (sales) in the United States.
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