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Watch your neighbor: Strategic competition in waste collection and service quality

Bel, G; Sebő, M; (2021) Watch your neighbor: Strategic competition in waste collection and service quality. Waste Management , 127 pp. 63-72. 10.1016/j.wasman.2021.04.032.

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Abstract

Public procurement is frequently used to contract solid waste collection services. Incomplete contracts and transaction costs increase the need for monitoring and supervision. In such cases, competition by comparison can be a useful tool. In Barcelona, solid waste collection is regulated by competition, with four delivery zones being contracted out separately. Therefore, it is possible to make relative performance assessments, especially in the areas where the contracted firms operate close to each other. Private firms anticipate stronger competitive pressures near to competitors' zones, even after the contract has been awarded, and they compete on quality. This research studies the influence of the proximity between competitors on the quality of service delivery. Monthly data on the number of complaints regarding waste collection in the city's 73 neighborhoods between 2014 and 2019 is used to evaluate quality. Using count model approaches, our results show that higher quality is provided in neighborhoods closer to other neighborhoods served by a competing firm. Moreover, lower quality is delivered in peripheral neighborhoods, where comparison with competitors' neighborhoods is much harder, if at all possible. The results are consistent with the hypothesis that firms strategically manage quality performance and tend to deliver higher quality where they anticipate that monitoring by the regulator is easier. The findings add to the existing knowledge of competition as a regulatory tool used to obtain more information and providing useful insights to policymakers and regulators to better understand firms’ behavior in quality delivery.

Type: Article
Title: Watch your neighbor: Strategic competition in waste collection and service quality
DOI: 10.1016/j.wasman.2021.04.032
Publisher version: http://dx.doi.org/10.1016/j.wasman.2021.04.032
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Waste collection, Management, Competition, Service quality, our neighbor
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Political Science
URI: https://discovery.ucl.ac.uk/id/eprint/10128893
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