Collusion in the Dutch Waste Collection Market

Abstract

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.

Keywords: Waste collection, collusion, public-private firms, contracting out

JEL Classification: D43, L33, R51