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Institutional developments in the Dutch waste-collection market

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  • Elbert Dijkgraaf
  • Raymond H J M Gradus

Abstract

We analyse the Dutch waste-collection market for 1998 – 2005. We show that municipalities with unit-based pricing (UBP) or waste collection by private companies have lower costs. However, this cost advantage decreases over time as competition decreases, because of the introduction of the VAT-compensation fund, and because of contamination of waste streams. The cost advantage of private provision is shown to be much larger in the first years, while a longer duration of private production results in lower efficiency. An important conclusion from this study is that UBP, although its effectiveness deteriorates over time, is more effective in reducing cost than is contracting out. Moreover, we show that the effect of contracting out might have been overestimated in the previous literature because there is a correlation between the use of contracting out and UBP. Low incentive UBP systems, based on volume or frequency, are only effective when the municipality does not collect the waste itself.

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Bibliographic Info

Article provided by Pion Ltd, London in its journal Environment and Planning C: Government and Policy.

Volume (Year): 26 (2008)
Issue (Month): 1 (February)
Pages: 110-126

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Handle: RePEc:pio:envirc:v:26:y:2008:i:1:p:110-126

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Fullerton, Don & Kinnaman, Thomas C, 1996. "Household Responses to Pricing Garbage by the Bag," American Economic Review, American Economic Association, vol. 86(4), pages 971-84, September.
  2. Mitchell, Karlyn & Onvural, Nur M, 1996. "Economies of Scale and Scope at Large Commercial Banks: Evidence from the Fourier Flexible Functional Form," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(2), pages 178-99, May.
  3. Elbert Dijkgraaf & Raymond Gradus, 2004. "Cost savings of unit-based pricing of household waste: The case of the Netherlands," Public Economics 0409001, EconWPA.
  4. AndréS GóMez-Lobo & Stefan Szymanski, 2001. "A Law of Large Numbers: Bidding and Compulsory Competitive Tendering for Refuse Collection Contracts," Review of Industrial Organization, Springer, vol. 18(1), pages 105-113, February.
  5. Domberger, S & Meadowcroft, S & Thompson, D J, 1986. "Competitive tendering and efficiency: the case of refuse collection," Fiscal Studies, Institute for Fiscal Studies, vol. 7(4), pages 69-87, November.
  6. Eoin Reeves & Michael Barrow, 2000. "The Impact of Contracting Out on the Costs of Refuse Collection Services - The Case of Ireland," The Economic and Social Review, Economic and Social Studies, vol. 31(2), pages 129-150.
  7. Ohlsson, H., 1998. "Ownership and Production Costs Choosing Between Public Production and Contracting Out," Papers 1998-6, Uppsala - Working Paper Series.
  8. Stefan Szymanski, 1996. "The impact of compulsory competitive tendering on refuse collection services," Fiscal Studies, Institute for Fiscal Studies, vol. 17(3), pages 1-19, August.
  9. Ivaldi, Marc, et al, 1996. "Comparing Fourier and Translog Specifications of Multiproduct Technology: Evidence from an Incomplete Panel of French Farmers," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 649-67, Nov.-Dec..
  10. Humphrey, David B. & Vale, Bent, 2004. "Scale economies, bank mergers, and electronic payments: A spline function approach," Journal of Banking & Finance, Elsevier, vol. 28(7), pages 1671-1696, July.
  11. Elbert Dijkgraaf & Raymond Gradus, 2004. "Cost savings of contracting out refuse collection," Public Economics 0409002, EconWPA.
  12. Mildred Warner & Robert Hebdon, 2001. "Local Government Restructuring: Privatization and Its Alternatives," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(2), pages 315-336.
  13. Germa Manel Bel Queralt & Antonio Miralles, 2002. "Factors influencing privatization of urban solid waste collection: some evidence from Spain," Working Papers in Economics 74, Universitat de Barcelona. Espai de Recerca en Economia.
  14. Gallant, A. Ronald, 1982. "Unbiased determination of production technologies," Journal of Econometrics, Elsevier, vol. 20(2), pages 285-323, November.
  15. Creel, Michael & Farell, Montserrat, 2001. "Economies of scale in the US airline industry after deregulation: a Fourier series approximation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(5), pages 321-336, November.
  16. Linderhof, Vincent & Kooreman, Peter & Allers, Maarten & Wiersma, Doede, 2001. "Weight-based pricing in the collection of household waste: the Oostzaan case," Resource and Energy Economics, Elsevier, vol. 23(4), pages 359-371, October.
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Citations

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Cited by:
  1. Valentina Iafolla & Massimiliano Mazzanti & Francesco Nicolli, 2010. "Rifiuti generati, rifiuti in discarica ed efficacia delle politiche ambientali in Europa," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 0(2), pages 103-135.
  2. Germ� Bel & Xavier Fageda & Mildred E. Warner, 2010. "Is private production of public services cheaper than public production? A meta-regression analysis of solid waste and water services," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(3), pages 553-577.
  3. E. Dijkgraaf & R. Gradus, 2011. "Efficiency Effects of Privatising Refuse Collection: Be careful and Alternatives present," Tinbergen Institute Discussion Papers 11-156/3, Tinbergen Institute.
  4. Elbert Dijkgraaf & Raymond Gradus & Thomas Kinnaman & Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2008. "Comments: Elbert Dijkgraaf and Raymond Gradus, Thomas Kinnaman; and a Correction," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 243-244, Spring.
  5. Valentina Iafolla & Massimiliano Mazzanti & Francesco Nicolli, 2010. "Are You SURE You Want to Waste Policy Chances? Waste Generation, Landfill Diversion and Environmental Policy Effectiveness in the EU15," Working Papers 2010.77, Fondazione Eni Enrico Mattei.
  6. Xavier Fageda & Germa Bel, 2008. "Choosing hybrid organizations for local servicesdelivery: An empirical analysis of partial privatization," IREA Working Papers 200803, University of Barcelona, Research Institute of Applied Economics, revised Apr 2008.
  7. E. Dijkgraaf & R. Gradus, 2011. "Efficiency Effects of Privatising Refuse Collection: Be careful and Alternatives present," Tinbergen Institute Discussion Papers 11-156/3, Tinbergen Institute.

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