The Costs of Disposal and Recycling: An Application to Italian Municipal Solid Waste Services

Abrate G., Erbetta F., Fraquelli G. and Vannoni D. The costs of disposal and recycling: an application to Italian municipal solid waste services, Regional Studies. The paper investigates the costs of waste disposal and recycling services by using a well-behaved Composite cost function model. The estimates on a unique sample of more than 500 Italian municipalities highlight that the refuse collection technology exhibits constant returns to scale as well as scope economies between disposal and recycling. As far as the size of the municipality increases, scope economies rise up to 20%, but they are accompanied by overall diseconomies of scale. The findings suggest that, on the one hand, joint management of disposal and recycling should be encouraged and, on the other hand, that strategies aimed at increasing the share of waste sent for recycling would not imply a considerable increase in total costs.

[1]  Paolo Chiades,et al.  The Urban Waste Sector 11 Years after the Ronchi Decree , 2008 .

[2]  Germà Bel,et al.  Do Public Sector Reforms Get Rusty? Local Privatization in Spain , 2006 .

[3]  Davide Vannoni,et al.  Choosing among alternative cost function specifications: an application to Italian multi-utilities , 2004 .

[4]  Q. Vuong.  Likelihood Ratio Tests for Model Selection and Non-Nested Hypotheses , 1989 .

[5]  A. Zellner.  An Efficient Method of Estimating Seemingly Unrelated Regressions and Tests for Aggregation Bias , 1962 .

[6]  Thomas C. Kinnaman.  Why do Municipalities Recycle? , 2005 .

[7]  Thomas C. Kinnaman.  Policy Watch: Examining the Justification for Residential Recycling , 2006 .

[8]  Barbara J Stevens,et al.  Scale, Market Structure, and the Cost of Refuse Collection , 1978 .

[9]  Y. Braunstein,et al.  A Composite Cost Function for Multiproduct Firms with an Application to Economies of Scope in Banking , 1992 .

[10]  Elbert Dijkgraaf,et al.  Collusion in the Dutch waste collection market , 2005 .

[11]  R C Mueller.  Organization and efficiency. , 1966, Journal of the American Optometric Association.

[12]  Werner Z. Hirsch,et al.  Cost Functions of an Urban Government Service: Refuse Collection , 1965 .

[13]  Marjorie B. McElroy,et al.  Goodness of fit for seemingly unrelated regressions: Glahn's R2y.x and Hooper's r̄2 , 1977 .

[14]  Robert A. Bohm,et al.  The costs of municipal waste and recycling programs , 2010 .

[15]  Gilberto Turati,et al.  Restructuring hospital industry to control public health care expenditure: The role of input substitutability , 2010 .

[16]  Germà Bel,et al.  GASTO MUNICIPAL POR EL SERVICIO DE RESIDUOS SÓLIDOS URBANOS , 2006 .

[17]  Carlo Cambini,et al.  The Influence of Corporatization Process on the Cost of Publicly Provided Local Utilities: Some Insights from Bus Transit Systems , 2008 .

[18]  Henry Ohlsson,et al.  Ownership and Production Costs: Choosing between Public Production and Contracting-Out in the Case of Swedish Refuse Collection , 1998 .

[19]  Henry Ohlsson.  Ownership and input prices : A comparison of public and private enterprises , 1996 .

[20]  Xavier Fageda,et al.  Empirical analysis of solid management waste costs: Some evidence from Galicia, Spain , 2009 .

[21]  Luca Grilli,et al.  Management Discretion and Political Interference in Municipal Enterprises. Evidence from Italian Utilities , 2010 .

[22]  Xavier Fageda,et al.  Is Private Production of Public Services Cheaper Than Public Production? A Meta-Regression Analysis of Solid Waste and Water Services. , 2010 .

[23]  Germà Bel,et al.  Intermunicipal cooperation, privatization and waste management costs: evidence from rural municipalities. , 2009, Waste management.

[24]  Rune J. Sørensen,et al.  DOES DISPERSED PUBLIC OWNERSHIP IMPAIR EFFICIENCY? THE CASE OF REFUSE COLLECTION IN NORWAY , 2007 .

[25]  W. Baumol,et al.  Contestable Markets and the Theory of Industry Structure , 1982 .

[26]  Massimo Filippini,et al.  Optimal Size in the Waste Collection Sector , 2002 .

[27]  Carlo Cambini,et al.  Corporatization and Firm Performance: Evidence from Publicly-Provided Local Utilities , 2011 .

[28]  Michael W. Tretheway,et al.  Analytical Studies in Transport Economics: Network effects and the measurement of returns to scale and density for U.S. railroads , 1986 .

[29]  Wayne Carroll.  The Organization and Efficiency of Residential Recycling Services , 1995 .

[30]  Elbert Dijkgraaf,et al.  Cost Savings of Contracting Out Refuse Collection , 2005 .

[31]  Scott J. Callan,et al.  Economies of Scale and Scope: A Cost Analysis of Municipal Solid Waste Services , 2001, Land Economics.

[32]  Michael Barrow,et al.  The impact of contracting out on the costs of refuse collection services: the case of Ireland , 2000 .

[33]  W. Diewert.  Applications of Duality Theory , 1974 .

[34]  Germà Bel i Queralt,et al.  Is Private Production of Public Services Cheaper than Public Production? A meta-regression analysis of solid waste and water services , 2009 .