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Economies of Scale and Scope: A Cost Analysis of Municipal Solid Waste Services

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  • Scott J. Callan
  • Janet M. Thomas

Abstract

The economics literature in municipal solid waste (MSW)markets is concerned primarily with demand-side issues and the associated policy implications. Few have studied the cost structure of this market, and none model the multiple product nature of MSWservices. We argue that the production of MSWservices has two major components Ð disposal and recycling, and that cost complementarities between the two activities may exist. Hence, we specify a multipleoutput cost structure, which models the relationship between recycling and disposal activity and investigates the extent of product-speci® c scale economies and overall scope economies in this market.

Suggested Citation

  • Scott J. Callan & Janet M. Thomas, 2001. "Economies of Scale and Scope: A Cost Analysis of Municipal Solid Waste Services," Land Economics, University of Wisconsin Press, vol. 77(4), pages 548-560.
  • Handle: RePEc:uwp:landec:v:77:y:2001:i:4:p:548-560
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    References listed on IDEAS

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    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, pages 1-15.
    2. Dubin, Jeffrey A & Navarro, Peter, 1988. "How Markets for Impure Public Goods Organize: The Case of Household Refuse Collection," Journal of Law, Economics, and Organization, Oxford University Press, pages 217-241.
    3. James D. Reschovsky & Sarah E. Stone, 1994. "Market incentives to encourage household waste recycling: Paying for what you throw away," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(1), pages 120-139.
    4. 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.
    5. Marie Lynn Miranda & Jess W. Everett & Daniel Blume & Barbeau A. Roy, 1994. "Market-based incentives and residential municipal solid waste," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(4), pages 681-698.
    6. Scott J. Callan & Janet M. Thomas, 1997. "The Impact of State and Local Policies on the Recycling Effort," Eastern Economic Journal, Eastern Economic Association, vol. 23(4), pages 411-423, Fall.
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    More about this item

    JEL classification:

    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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