Abstract
The collection costs of the recycling industry are higher in high-income countries than in middle-income countries. This is mainly due to the fact that in middle-income countries, recycling collection is handled by the informal sector, and these waste collectors do not adhere the prescribed health and safety conditions. In this paper, we use the Peruvian recycling industry as a case study of the recycling industry in a middle income country. The analysis of the structure of the recycling industry in Peru suggests that this industry faces a major challenge as the country continues its economic development. We show how variations in the technical, legal, and work regulations in Peru will modify the cost structure of plastics recycling operations. A forecast regarding the viability of the recycling industry in Peru in the coming years is made and based on this analysis. We propose that technification is needed for this industry to remain viable in middle-income countries. The analysis presented here can be easily extended to other middle income countries.
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