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Anticipating the location of a waste collection point: an application based on Portugal

Author

Listed:
  • Vitor Miguel Ribeiro

    (University of Aveiro and Autoridade Nacional de Comunicações (ANACOM))

  • Mario Pezzino

    (University of Manchester)

Abstract

We study the optimal location of a waste facility in a horizontally differentiated duopoly where firms choose their location and price. The policymaker decides the location of a waste facility targeting social welfare maximization. Consistent with the observation of the location decisions of waste facilities in Portugal, we show that the optimal location of a waste facility is never in the city center under partial ex-post regulation. Ex-ante regulation ensures the highest level of social welfare, but from a theoretical point of view, it requires a waste facility located in the city center. A robustness check is then provided to justify that, in actual regulatory practice, a first-mover regulator maximizes social welfare without necessarily imposing the installation of a waste facility in the city center.

Suggested Citation

  • Vitor Miguel Ribeiro & Mario Pezzino, 2019. "Anticipating the location of a waste collection point: an application based on Portugal," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 18(2), pages 87-106, June.
    • Handle: RePEc:spr:portec:v:18:y:2019:i:2:d:10.1007_s10258-018-0146-4
    DOI: 10.1007/s10258-018-0146-4
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
    2. Michael Crew & Anthony Heyes, 2013. "Market-based approaches to environmental regulation: Editors’ introduction," Journal of Regulatory Economics, Springer, vol. 44(1), pages 1-3, August.
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    More about this item

    Keywords

    Waste management; Spatial competition; Location; Waste collection point; Price competition;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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