Efficiency Effects of Privatising Refuse Collection: Be careful and Alternatives present
For refuse collection, we estimate the cost effects of different institutional modes using panel data for almost all Dutch municipalities between 1998 and 2010. The modes we consider are private contracts, intermunicipal cooperation, public provision and own collection. For private companies, the cost advantage is substantially smaller and non-significant if municipal fixed effects are included. The cost advantage of intermunicipal cooperation is larger in this case than that of privatisation. Moreover, if yearly mode dummies and mode duration are also included, we show that for 2004, 2005 and 2006 a large cost increase is visible for privatisation. Which mode offers the most cost-saving opportunity depends strongly on the year and the mode duration. For private contracts, the duration effects lead to lower costs; for municipal cooperation and public provision, there are extra costs to begin with, which disappear after 5 or 6 years.
|Keywords||contracting out, fixed effects, private firms, waste collection|
|JEL||Oligopoly and Other Forms of Market Imperfection (jel D43), Comparison of Public and Private Enterprises; Privatization; Contracting Out (jel L33), Finance in Urban and Rural Economies (jel R51)|
Dijkgraaf, E, & Gradus, R.H.J.M. (2011). Efficiency Effects of Privatising Refuse Collection: Be careful and Alternatives present (No. TI 2011-156/3). Discussion paper / Tinbergen Institute (pp. 1–19). Tinbergen Institute. Retrieved from http://hdl.handle.net/1765/26865