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Contracting-Out of Household Waste Collection Services in Japan

Author

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  • Norimichi Matsueda

    (School of Economics, Kwansei Gakuin University)

  • Jun'ichi Miki

    (School of Business Administration, Kwansei Gakuin University)

Abstract

We first report three empirical findings from our survey on the contracting-out of municipal waste collection services in Japan: 1) the rate of contracting-out and the contract price are inversely related, 2) this inverse relationship tapers out as the contracting rate becomes sufficiently high, and the contract price even tends to go up as the contracting rate approaches 100%, and 3) there is a significant disparity in the contracting rates between the eastern and western parts of Japan. In order to account for these observations, we then set up a simple analytical model and examine its implications. Also, we discuss the issues that a potential hold-up situation could give rise to when the services are completely contracted out to private firms.

Suggested Citation

  • Norimichi Matsueda & Jun'ichi Miki, 2013. "Contracting-Out of Household Waste Collection Services in Japan," Discussion Paper Series 111, School of Economics, Kwansei Gakuin University, revised Nov 2013.
    • Handle: RePEc:kgu:wpaper:111
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    References listed on IDEAS

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    1. 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.
    2. David E. M. Sappington & Joseph E. Stiglitz, 1987. "Privatization, information and incentives," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 6(4), pages 567-585.
    3. Ohlsson, Henry, 1996. "Ownership and input prices: A comparison of public and private enterprises," Economics Letters, Elsevier, vol. 53(1), pages 33-38, October.
    4. Henry Ohlsson, 2003. "Ownership and Production Costs: Choosing between Public Production and Contracting-Out in the Case of Swedish Refuse Collection," Fiscal Studies, Institute for Fiscal Studies, vol. 24(4), pages 451-476, December.
    5. Stevens, Barbara J, 1978. "Scale, Market Structure, and the Cost of Refuse Collection," The Review of Economics and Statistics, MIT Press, vol. 60(3), pages 438-448, August.
    6. John Cubbin & Simon Domberger & Shirley Meadowcroft, 1987. "Competitive tendering and refuse collection: identifying the sources of efficiency gains," Fiscal Studies, Institute for Fiscal Studies, vol. 8(3), pages 49-58, August.
    7. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
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    Cited by:

    1. Hiroaki Ino & Norimichi Matsueda & Jun'ichi Miki, 2019. "Hold-up Problems in Contracting Out Waste Collection Services," Discussion Paper Series 186, School of Economics, Kwansei Gakuin University, revised May 2022.

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    More about this item

    Keywords

    waste collection; contracting-out; contract price; hold-up;
    All these keywords.

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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