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Institutional developments in the Dutch waste-collection market

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Author Info
Elbert Dijkgraaf
Raymond H J M Gradus

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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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Publisher 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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  1. 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. [Downloadable!]
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This page was last updated on 2009-11-26.

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