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