Municipal Solid Waste generation dynamics. Breaks and thresholds analysis in the Italian context

Municipal solid waste prevention represents a topical point in circular economy policies within the European Union. It is therefore paramount to assess its state of decoupling from economic activity. There is weak evidence from empirical research that Italy managed to achieve this structural change locally. Decoupling is not arising homogenously in the waste generation-income relationship in Italy over the last two decades. The heterogeneity in economic performances and waste policies could be an explanation. However, it is possible to find common patterns between decoupler against non-decoupler provinces. This paper involves panel data of 103 provinces during eighteen years (2001-2018) of Italian Provinces (NUTS3) to assess the drivers of structural changes in the income-waste relation. The innovation consists of the use of a threshold model to assess the minimal requirements of socio-economic performances to decouple economic activity to non-separated waste. The threshold point differs from the tipping point as it is always observable in the panel. Previous studies mostly estimated the latter involving panel data analysis. This often resulted in fallacious interpretation, especially due to spurious regressions. The observability is a relevant criterion, as several provinces have achieved the decoupling state. Results indicate that economic activity and tourist are relevant threshold variables in waste prevention. Both are sources of local financing; thus, it is probable that circular practices are dependent on the volume of potential expenditure rather than structural characteristics such as population density.