The economic literature on urban solid waste collection is scarce, although this type of services has undergone organizational as well as regulatory reforms. This research studies the factors explaining why the costs imposed by this service vary among municipalities. To do so, first we derive a municipal cost function. We then specify and estimate an explanatory model on a sample of municipalities. Empirical results are used to study economies of scale, economies of scope and the impact on municipal costs of some factors directly related to the service, such as recycling, frequency and location of a landfill in the municipality. In addition to this, we analyse the effects on municipal costs of density, wage levels, peak periods and contracting out.

Key words: local government, privatization, contracting-out, environmental management.
JEL classification: H72, L33, Q24, R50.