Conditionally predictive supply elasticity estimates: Secondary materials obtained from municipal residuals

New capital-intensive waste processing plants have been developed that can recover secondary materials and energy from the municipal solid waste stream resulting in lower disposal costs than traditional methods. The potential supply of secondary glass, ferrous metals, aluminum, and energy is estimated using an engineering cost model of secondary materials and energy supply under alternative prices for energy and materials. Econometric estimates of the own- and cross-price elasticities of supply for the materials and energy are then estimated from the data set. Significant cross-price effects are shown.