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The effects of market concentration on costs of local public services: empirical evidence from Dutch waste collection

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  • Raymond Gradus
  • Martijn Schoute
  • Elbert Dijkgraaf

Abstract

Different concentration indexes are calculated for the Dutch waste collection market and all show that this market was highly concentrated in 2002, 2006, 2010 and 2014. The estimation results in 2002 show that private collection is cheaper but high concentration increases costs of private collection and therefore (partly) offsets the advantage of contracting out. In 2006, the savings gained from privatisation and also the effect of concentration disappear, probably due to the introduction of a VAT-compensation fund. In 2010, for an area with a radius of 30 km, high concentration increases costs, but for larger areas, this effect mostly disappears. For 2014, in most estimations, this concentration effect disappears. If we include fixed effects for a panel, the cost advantage of inter-municipal cooperation is larger than that of private production and concentration effects also disappear. Overall, these estimation results are rather independent of the concentration indexes used, if we investigate several indexes as an alternative for the Herfindahl–Hirschman index.

Suggested Citation

  • Raymond Gradus & Martijn Schoute & Elbert Dijkgraaf, 2018. "The effects of market concentration on costs of local public services: empirical evidence from Dutch waste collection," Local Government Studies, Taylor & Francis Journals, vol. 44(1), pages 86-104, January.
    • Handle: RePEc:taf:flgsxx:v:44:y:2018:i:1:p:86-104
    DOI: 10.1080/03003930.2017.1380629
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    Cited by:

    1. Massimo Beccarello & Giacomo Di Foggia, 2022. "Managerial Functions of an Independent Coordinating Body in the Governance of Waste Management," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 12(2), pages 1-48, December.
    2. An Zhou & Shenhan Wu & Zhujie Chu & Wei-Chiao Huang, 2019. "Regional Differences in Municipal Solid Waste Collection Quantities in China," Sustainability, MDPI, vol. 11(15), pages 1-12, July.
    3. Fredrik Andersson & Henrik Jordahl & Jens Josephson, 2019. "Outsourcing Public Services: Contractibility, Cost, and Quality," CESifo Economic Studies, CESifo Group, vol. 65(4), pages 349-372.
    4. Germà Bel & Marianna Sebo, 2020. "Introducing and enhancing competition to improve solid waste management in Barcelona," IREA Working Papers 202004, University of Barcelona, Research Institute of Applied Economics, revised Apr 2020.
    5. Juri Demuth & Hans W. Friederiszick & Steffen Reinhold, 2022. "Reverse Privatization as a Reaction to the Competitive Environment: Evidence from Solid Waste Collection in Germany," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(2), pages 217-261, March.
    6. Isaria Kisoli & Wilfred Lameck, 2022. "Reconstructing the process of outsourcing solid waste management in Tanzania local government authorities," SN Business & Economics, Springer, vol. 2(8), pages 1-17, August.
    7. Antonio Massarutto, 2019. "Italian waste in the circular economy: A agenda for industry regulators in Italy," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2019(1), pages 9-48.
    8. Giacomo Di Foggia & Massimo Beccarello, 2021. "Market Structure of Urban Waste Treatment and Disposal: Empirical Evidence from the Italian Industry," Sustainability, MDPI, vol. 13(13), pages 1-12, July.

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