Giovanni Fraquelli
(University of Turin and Ceris-Cnr)

Roberto Giandrone
(Italgas S.p.A and Ceris-Cnr)

This work examines the purification processes of urban waste waters in Italy, with reference to costs and technology. The operating cost function of 103 plants shows that an increase in the sizes of the smaller ones generates strong economies of scale. A minimum efficient size at about 100,000 inhabitants, however, inhibits the creation of large monopolies at a local level and allows to maintain indirect competition. Among the explanatory variables of the costs, the pollution load of the waste water takes on a high statistical significance and suggests environmental prevention. The recent introduction of advanced treatments is expensive, but their costs are balanced by a notable improvement in the pureness of the effluent. As for general environmental policies, it is necessary to find good compromise between the need to improve the effectiveness of the existing plants and the investments in areas where the water purification service is still inexistent.

Key words: Waste-Water, Pollution-Treatment, Costs
Jel Classification: L95, Q25

Corresponding author:
Giovanni Fraquelli
c/o CERIS-CNR
Via Avogadro 8
10121 Torino, Italy; Tel: ++39-011-5601210; Fax: ++39-011-5626058
e-mail: g.fraquelli@ceris.to.cnr.it

The contents of this research express solely the views of the authors and do not involve the responsibility of Italgas S.p.A.
We are grateful for comments to L. Benfratello, P. Olivier, M. Piacenza, P. Romano and D. Vannoni. We also acknowledge the assistance of S. Zelli and M. Zittino (Ceris-Cnr) in helping us to collect the information.