Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76596
Authors: 
Borge, Lars-Erik
Rattsø, Jørn
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper 1033
Abstract: 
The paper investigates the relationships between costs and user charges in the sewage industry in Norwegian local governments. The purpose of the analysis is to answer the following questions: (i) To what extent is a higher unit cost passed on to consumers in terms of a higher user charge? (ii) Does user charge financing lead to higher or lower unit cost? The econometric analysis indicates that around 40 per cent of a cost increase is passed on to consumers in terms of higher user charge. Moreover, user charge financing has a significant negative effect on the unit cost. An increase in the degree of user charge financing by 10 per cent-points is predicted to reduce the unit cost by 5-8 per cent.
Subjects: 
cost control
user charges
sponsor-bureau model
utility service
Document Type: 
Working Paper

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