Governments around the world have introduced an efficient garbage management system for environmental protection and productive land use. Using the case of South Korea, this study examines how unit-pricing by the bag (UPB), as a Pigouvian tax, affects waste disposal. We supplement the extant literature by expanding the scope to one country with municipal-level units across years, applying new control variables, and conducting heterogeneous estimations. The results indicate that this policy induces eco-friendly behaviors by reducing landfill garbage and increasing recycling; however, the total volume of waste disposal is not affected, implying that the effects of UPB are realized within the intensive rather than extensive margin. These effects are more noticeable in the case of the high price elasticity of demand for waste disposal, suggesting a possibility for price discriminatory policies.