Urban mining: The relevance of information, transaction costs and externalities

Mobile phones are one of the most commonly owned personal electronic devices and they contain about 15 different metals, mostly extracted with severe negative environmental externalities. Sourcing metals from retired mobile phones, i.e. urban mining, could alleviate these effects. In this study, we analyse the viability of urban mining in Switzerland using a representative survey of 2,500 Swiss respondents and an experiment with 15,000 employees of a Swiss institution. We estimate that there are around seven million unused phones with embedded gold worth USD 10 million in Switzerland. People do not particularly value their retired phones: 22% do not know why they keep it, and 40% said they are willing to sell their old device for less than USD 5. We further find that while informational treatments do not change recycling rates, reducing transaction costs of recycling double return rates from 2.1% to 5.5%. Lastly, while urban mining is not economically viable if we only consider the market value of embedded metals, it is profitable when taking into account the environmental cost of producing a new mobile device with metals from a primary mine.