Non-Junk Junk Money - Technical Efficiency and Productivity across Junk and Scrap Dealerships - Working Paper No. 7 - Version 1

Aug 27, 2026

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Some forms of environmentalism respond to community concerns, yet practical cleanup depends on whether recycling and waste management programs deliver sufficient marginal costs and benefits. This working paper studies the technical efficiency and productivity of 26 junk and scrap wholesale dealerships in Arizona, USA. Results show average technical efficiency and productivity, but large variation across firms. The findings support continued investment while noting limits in the available data for deeper cost-structure conclusions.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages25

Reading Time1 h 3 min

AccessFree to download

Working paper overview

Research question and environmental policy context

Data, model, and evaluation approach

Theoretical basis for efficiency and productivity

1 Non-Junk Junk Money: Technical Efficiency and Productivity across Junk and Scrap Dealerships Working Paper No. 7 Version 1 Draft 3 [December 2004] Voxi Heinrich S. Amavilah1 REEPS PO Box 38061, Phoenix, AZ 85069-8061 [amavilah@msn.com](amavilah@msn.com) Abstract-Some forms of environmentalism has generated many positive responses from concerned communities. Sophisticated theories addressing various aspects of environmental policy abound. At the practical level private economic agents following their self-interests confront the challenge of cleaning up the environment through recycling and other waste management programs. Among these agents are what I call here junk and scrap dealerships. But cleaning up will continue only if the marginal costs and benefits are at least equal. How do thesefirmsfare? This simple question is rarely addressed. This paper examines the technical efficiency and productivity utilizing datafor 26junk and scrap wholesale dealershipsin Arizona, USA. It finds that junk and scrap dealerships are technically efficient and productive on average. However, both efficiency and productivity vary widely among dealerships. A reasonable conclusion is that junk and scrap dealership contribute to a clean environment, and that may alone be a sufficient basis for continued investment in these labor-owned/manage-firms. This recommendation proceeds cautiously because available data did not support clear understanding of the economic efficiency and cost structures of firms. Keywords: junk and scrap: production, sales, technical efficiency and productivity JEL Code: L2, C21, R3, Q53 1I am grateful to the librarians at the Phoenix Burton Barr Public Library and the Thunderbird Graduate School of International Management Library for helping me locate sources of the data used here, and to Tamara Bishop-Amavilah for editorial assistance. All errors are mine alone. 2 PEOPLE everywhere in the world desire a high standard of living for themselves and their offspring. Simultaneously they do not like junk and scrap dealerships in their neighborhoods, although a high standard of living is almost always associated with increased production and consumption of goods and services (Luton, 1996, Baumol and Oates, 1988) . Production and consumption activities generate junk and scrap which have the effect of reducing the standard of living either by imposing high external costs on, or constraining current and future, economic growth.2 In a recent survey of existing literature on the economics of solid waste management, Chakrabarti and Sarkhel (2003) conclude that waste management has become a hot topic for at least three reasons. First, the scarcity of landfills is driving rent (land price) up high, and the implications for this are obvious. Second, waste disposal is imposing higher and higher external costs on the environment. Adjusted for external costs, the cost of living is higher than suggested now; alternatively the standard of living is overestimated if external costs are not subtracted. Third, there is a growing acceptance that waste management provides external benefits. Among the obvious is that the average capital cost of reprocessing secondary metal, for example, is only 20-30% that of processing virgin (primary) metal (Anderson, 1987, Yohe, 1979, Grace, Turner and Walter, 1981) . The final benefits are lower prices for the consumer as well as reduced pressure on known reserves of scarce resources (Haque, 1994) . 2AJEP paper by Dr. Kenneth Arrow and his very distinguished coauthors (2004) provides an authoritative statement on whether human beings are putting Earth at excessive risk by over-consuming. To quantify social benefits some experts like Slade (1980), and many others utilize various rationalizations of Koyck, such as Nerlove’s stock adjustment mechanism, to represent the quantity of desired stock of junk and scrap as (1) where Q * i is the desired level of junk and scrap, Qi is th

FAQs

What is the main question addressed by the paper?

How junk and scrap dealerships fare in terms of technical efficiency and productivity, given that environmental cleanup depends on marginal costs and benefits.

What data and sample size does the study use?

It uses data from 26 junk and scrap wholesale dealerships in Arizona, USA.

What are the key findings about efficiency and productivity?

Dealerships are technically efficient and productive on average, but both efficiency and productivity vary widely across dealerships.

Aug 27, 2026

Upload by Connor