Elbert Dijkgraaf

Burn or bury? A social cost comparison of final waste disposal methods

This paper uses private and environmental cost data for the Netherlands to evaluate the social cost of two final waste disposal methods, landfilling versus incineration using waste-to-energy (WTE) plants. The data only provide some support for the widespread policy preference for incineration over landfilling if the analysis is restricted to environmental costs alone. Private costs, however, are so much higher for incineration, that landfilling is the social cost minimizing option at the margin even in a densely populated country such as the Netherlands. Implications for waste policy are discussed as well. Proper treatment of and energy recovery from landfills seem to be the most important targets for waste policy. WTE plants are a very expensive way to save on climate change emissions.

Collusion in the Dutch waste collection market

In this paper we analyse whether collusion exists in the Dutch waste collection market, which shows a high degree of concentration. Although scale effects might be in accordance with this market outcome, the question is whether this concentration is in fact a result of fair competition. Using data for (nearly) all Dutch municipalities we estimate whether collusion exists and what the impact is on tariffs for waste collection. The results indicate that high concentration increases prices and therefore (partly) offsets the advantage of contracting out. The presence of competing public firms might be essential to ensure more and fair competition.

Institutional developments in the Dutch waste-collection market

We analyse the Dutch waste-collection market for 1998–2005. We show that municipalities with unit-based pricing (UBP) or waste collection by private companies have lower costs. However, this cost advantage decreases over time as competition decreases, because of the introduction of the VAT-compensation fund, and because of contamination of waste streams. The cost advantage of private provision is shown to be much larger in the first years, while a longer duration of private production results in lower efficiency. An important conclusion from this study is that UBP, although its effectiveness deteriorates over time, is more effective in reducing cost than is contracting out. Moreover, we show that the effect of contracting out might have been overestimated in the previous literature because there is a correlation between the use of contracting out and UBP. Low incentive UBP systems, based on volume or frequency, are only effective when the municipality does not collect the waste itself.

Mean and Bold? On Separating Merger Economies from Structural Efficiency Gains in the Drinking Water Sector

The Dutch drinking water sector experienced two drastic changes over the last 10 years. Firstly, the sector association started a voluntary benchmarking aimed to increase the efficiency and effectiveness of the sector. Secondly, merger activity arose. This paper develops a nonparametric model to dissect and distinguish the effects on efficiency of these evolutions. Parametric corrected ordinarily least squares (Fourier) tests show the robustness of the model with respect to the specification and its variables. Although detecting an efficiency enhancing effect of benchmarking, we find insignificant merger economies due to the absence of scale economies and the absence of increased incentives to fight inefficiencies.

Cost advantage cooperations larger than private waste collectors

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 enterprises, intermunicipal cooperation, municipality-owned enterprises and in-house collection. For private companies, the cost advantage becomes substantially smaller and nonsignificant if municipal fixed effects are included. The cost advantage of intermunicipal cooperation is larger in this case than that of privatization.

Environmental Kuznets Curves for CO2: Heterogeneity versus Homogeneity

We explore the emissions income relationship for CO2 in OECD countries using various modelling strategies.Even for this relatively homogeneous sample, we find that the inverted-U-shaped curve is quite sensitive to the degree of heterogeneity included in the panel estimations.This finding is robust, not only across different model specifications but also across estimation techniques, including the more flexible non-parametric approach.Differences in restrictions applied in panel estimations are therefore responsible for the widely divergent findings for an inverted-U shape for CO2.Our findings suggest that allowing for enough heterogeneity is essential to prevent spurious correlation from reduced-form panel estimations.Moreover, this inverted U for CO2 is likely to exist for many, but not for all, countries.

Fair competition in the refuse collection market

We estimate whether fair competition exists for tendering refuse collection in the Netherlands. The results indicate that concentration increases prices and offsets the advantage of contracting out. The presence of competing public firms might be essential to ensure fair competition.

Understanding Mixed Forms of Refuse Collection, Privatization, and Its Reverse in the Netherlands

ABSTRACT Based on panel data for almost all Dutch municipalities, we analyze changes in the mode of service production for refuse collection between 1998 and 2010. We distinguish execution by private enterprises, municipal enterprises, municipal cooperation, outsourcing to neighboring municipalities, and in-house collection. The number of municipalities using mixed forms, such as municipal enterprise, rose as the use of other forms declined, although municipal cooperation only decreased slightly. In approximately half of Dutch municipalities, the mode of production was stable between 1998 and 2010. In the other municipalities, shifts took place, with two-thirds being towards outside production and one-third towards inside production. Based on a logit model, we find some evidence of an ideological motivation for changing the mode of production. For income, we show that richer municipalities are less likely to change. We also illustrate the robustness of this result to various assumptions.

The Bicausal Relation between Religion and Income

In this article the relation between religion and income is investigated using a micro-dataset for the Netherlands. Religion is measured by religious membership and by participation. Instead of estimating a religion equation and an income equation separately, joint regression is preferred since this generally yields more efficient estimates. Following the single-equation approach, both religious measures are found to decrease income significantly and income is found to affect religion negatively. However, these cross-effects become insignificant once the equations are estimated simultaneously. In contrast, the effects of socio-economic characteristics on religion and income hardly differ between the approaches.

Is there still collusion in the Dutch waste collection market

ABSTRACT Concentration indexes based on regional markets show that the Dutch market for refuse collection is highly concentrated in 2002 and 2010. Similar to earlier work in 2007, the results indicate some evidence that high concentration increases costs and therefore (partly) offsets the advantage of contracting out. In 2002, results with respect to concentration are somewhat less robust. In 2010, the cost-advantage effect of private provision becomes smaller. However, for this year, we have a stronger indication that the cost advantage of private provision depends negatively on regional concentration measured by the Hirschman–Herfindahl Index.