Fabrizio Erbetta

The Costs of Disposal and Recycling: An Application to Italian Municipal Solid Waste Services

Abrate G., Erbetta F., Fraquelli G. and Vannoni D. The costs of disposal and recycling: an application to Italian municipal solid waste services, Regional Studies. The paper investigates the costs of waste disposal and recycling services by using a well-behaved Composite cost function model. The estimates on a unique sample of more than 500 Italian municipalities highlight that the refuse collection technology exhibits constant returns to scale as well as scope economies between disposal and recycling. As far as the size of the municipality increases, scope economies rise up to 20%, but they are accompanied by overall diseconomies of scale. The findings suggest that, on the one hand, joint management of disposal and recycling should be encouraged and, on the other hand, that strategies aimed at increasing the share of waste sent for recycling would not imply a considerable increase in total costs.

Produttività e redditività nella distribuzione locale di gas naturale in Italia: proprietà, diversificazione e scala operativa

The paper focuses on the analysis of the productivity and profitability of the natural gas distribution in Italy between 1994 and 1999. The period covers the years preceding the liberalisation act. The dynamic of efficiency and the characteristics of cost are analysed in a general framework and then associated to various organisational arrangements involving the type of ownership, the degree of diversification and the size. The main results outline a marked profitability but a low growth in the total factor productivity. The reason is to be searched in the price regulation system. More in detail, the public firms and the specialised ones show greater performances than their counterparts. Quite ambiguous influence is exerted by size variable.

Efficiency in the Consolidation of the Italian Water Sector

Despite since the mid-90s the regulation has encouraged horizontal and vertical bundling, the Italian water and sewerage industry is still largely fragmented. This work investigates the potential benefits of the process of consolidation, relying on realistic ex-ante merger hypotheses. A parametric methodology is used to implement the Bogetoft and Wang 2005’s decomposition of potential gains from mergers (J Prod Anal 23:145–171). When looking at strictly technological aspects, results do not provide univocal evidence in favor or against merger strategies, recommending a case-by-case approach in evaluating real merger projects. Moreover, the largest potential gains are due to managerial rather than technological inefficiency, thus their effective ex-post attainment ultimately depend on the ability to tackle the change and on political will.

The determinants of board compensation in SOEs: an application to Italian local public utilities

This article investigates the determinants of board compensation for a sample of Italian state owned enterprises (SOEs). To that purpose, we use newly collected panel data of 106 local public utilities observed from 1994 through 2004, which includes detailed information on the boards of directors. During this period, the deregulation process inspired institutional interventions that forced utilities, traditionally owned by local municipalities, to change their juridical form and ownership structure, thereby facilitating the entrance of private investors. The corporate governance literature shows that such changes may exacerbate the agency conflicts between shareholders, top executives and the board. However, board compensation could reduce the agency costs by aligning the incentives of managers with the interests of shareholders. This article addresses this issue by investigating the impact that board composition, firm characteristics and performance have on board compensation. We find that the average board pay is positively related to firm dimension and negatively related to board size. The public or private nature of the major shareholder does not influence board compensation but the juridical form does. Finally, while the proportion of politically connected directors is found to negatively influence the level of per capita compensation, the impact of firm performance is uncertain.

Size and Density Economies in Refuse Collection

The focus of the paper is to analyze the costs of solid waste collection by applying a well-behaved multiproduct cost function model to a sample of more than 500 Italian municipalities. Beyond shedding light on the presence and on the extent of size (or scale) economies, our aim is to investigate in depth the issue of economies of density, which is still an underexplored topic in the literature. Our cost function specification, by being able to estimate several measures of density economies (such as output density economies, vertical density economies and horizontal density economies), allows to capture the impact of different urbanization models on the costs of refuse collection and disposal. The results of the estimates highlight the presence of output density economies as well as horizontal density economies. Conversely, there is significant and robust evidence of the existence of vertical density diseconomies, which suggests that congestion problems in densely populated councils are severely affecting garbage collection costs. Finally, there is evidence of diseconomies of size, which suggests that aggregating the refusal collection operations of several municipalities would not bring savings in the average costs.

The economic sustainability of renewable energies

The transition toward a significant penetration of renewable sources in electricity generation, although desirable under an environmental viewpoint, is likely to be very costly due to the scarce adaptability to Renewable Energy (RE) sources characterized by relevant intermittency. In fact, generation from RE sources implies a change in the scheduling of the rest of generating facilities, which may affect operational costs of the power systems due to a more frequent cycling of thermal plants, i.e. a change in operating modes that occur in response to varying dispatching requirements. In this paper we investigate the effect on cost efficiency of energy operators as a consequence of the penetration of REs at the Country level using a two-step model based on Data Envelopment Analysis. The findings highlight a negative and significant impact of the index of penetration of REs on cost efficiency of firms involved in the production of programmable sources.

Managerial Efficiency and Firm Size: An Assessment of the Strategic Potential of Italian Manufacturing Industries

The main aim of the study is to examine the relationship between firm size and efficiency in Italian manufacturing industries. Although the literature has sometimes underlined the intrinsic weakness of an excessive fragmentation in industry organization, some authors have recently emphasized the role of medium-sized firms, as potentially benefitting from a mix of «structure» and «flexibility». Using Data Envelopment Analysis (DEA) on a sample of medium and large firms, the study disentangles technical efficiency into managerial and scale components. The results show a higher performance of small-medium class, associated with a more rational use of labour factor and a discipline effect of short-run debt.