| Abstract: | ABSTRACT The welfare effects of public versus private waste disposal with and without flow controls are analyzed. The pricing of private waste disposal services is modeled as being bounded above by the public entity's average disposal cost, but constrained by potential entry of private competitors. It is found that once a publicly owned disposal facility has been built, waste generators are almost always better off if their local government has flow control authority. This results from the necessity of covering the fixed costs of the public facility once it has been built, in conjunction with the expected pricing behavior of private firms. |
