Facoltà di scienze economiche

Optimal size in the waste collection sector

Antonioli, Barbara ; Filippini, Massimo

The purpose of this study is to analyze the cost structure of a sample of Italian waste collection firms in order to assess economies of scale and density and, therefore, to define the optimal size of the firms in this sector. A total and a variable translog cost function were estimated using panel data for a sample of 30 firms of waste collection and disposal operating at the provincial level... Plus

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    Summary
    The purpose of this study is to analyze the cost structure of a sample of Italian waste collection firms in order to assess economies of scale and density and, therefore, to define the optimal size of the firms in this sector. A total and a variable translog cost function were estimated using panel data for a sample of 30 firms of waste collection and disposal operating at the provincial level over the period 1991-1995. In both models, results indicate the existence of economies of density and economies of scale for most output levels. The empirical evidence suggests that franchised monopolies, rather than side-by-side competition, is the most efficient form of production organization in the waste collection industry. Further, the majority of the firms are not operating at an optimal scale. Therefore, the consolidation of adjacent service territories in small provinces is likely to reduce costs.