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Contracting-Out of Household Waste Collection Services in Japan

  • Norimichi Matsueda

    ()

    (School of Economics, Kwansei Gakuin University)

  • Jun'ichi Miki

    ()

    (School of Business Administration, Kwansei Gakuin University)

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.

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File URL: http://192.218.163.163/RePEc/pdf/kgdp111.pdf
File Function: First version, 2013
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Paper provided by School of Economics, Kwansei Gakuin University in its series Discussion Paper Series with number 111.

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Length: 18 pages
Date of creation: Nov 2013
Date of revision: Nov 2013
Handle: RePEc:kgu:wpaper:111
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  1. Ohlsson, Henry, 1998. "Ownership and Production Costs - Choosing Between Public Production and Contracting Out," Working Paper Series 1998:6, Uppsala University, Department of Economics.
  2. Ohlsson, Henry, 1996. "Ownership and input prices: A comparison of public and private enterprises," Economics Letters, Elsevier, vol. 53(1), pages 33-38, October.
  3. 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 438-48, August.
  4. David E. M. Sappington & Joseph E. Stiglitz, 1987. "Privatization, Information and Incentives," NBER Working Papers 2196, National Bureau of Economic Research, Inc.
  5. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817, March.
  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. 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.
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