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The Impact of Contracting Out on the Costs of Refuse Collection Services - The Case of Ireland

Author

Listed:
  • Eoin Reeves

    (University of Limerick)

  • Michael Barrow

    (University of Sussex)

Abstract

This paper examines the impact of contracting out on the costs incurred by local authorities in providing refuse collection services. Using original survey data for the Republic of Ireland, three methods of estimating the impact of tendering are adopted. Crude comparisons of costs before and after tendering and the costs of local authorities versus private contractors indicate that tendering can yield savings of between 34 and 45 per cent. Using multivariate regression analysis to enable us to control for service characteristics confirms cost savings of around 45 per cent. The bulk of these cost savings are attributed to real efficiency gains as a result of contracting out.

Suggested Citation

  • 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.
    • Handle: RePEc:eso:journl:v:31:y:2000:i:2:p:129-150
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    References listed on IDEAS

    as
    1. Stefan Szymanski, 1993. "Cheap rubbish? Competitive tendering and contracting out in refuse collection, 1981-88," Fiscal Studies, Institute for Fiscal Studies, vol. 14(3), pages 109-130, August.
    2. 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.
    3. Barrett, Alan & Lawlor, John, 1995. "The Economics of Solid Waste Management in Ireland," Research Series, Economic and Social Research Institute (ESRI), number PRS26.
    4. 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.
    5. Domberger, Simon & Jensen, Paul, 1997. "Contracting Out by the Public Sector: Theory, Evidence, Prospects," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 13(4), pages 67-78, Winter.
    6. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    7. 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.
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