The Relationships Between Costs and User Charges: The Case of a Norwegian Utility Service

Lars-Erik Borge () and Jorn Rattso

No 1033, CESifo Working Paper Series from CESifo

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.

Keywords: cost control; user charges; sponsor-bureau model; utility service (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-ene
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Citations: View citations in EconPapers (7)

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Journal Article: The Relationships between Cost and User Charges: The Case of the Norwegian Utility Service (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1033

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