This paper explores the driving forces behind household waste generation in the Portuguese municipalities. The focus of the analysis is to empirically test the validity of the waste Kuznets curve (wKc) hypothesis, which postulates an inverted U-shaped relationship between waste generation and economic activity. Panel data is collected for 307 municipalities over the 2009–2018 period. Estimating the fixed-effects model and its dynamic versions of the waste generation equation, the decoupling hypothesis is confirmed, although it is only observed in the richest region of Lisbon and three other municipalities. Results suggest that the productive structure of the local economies is important for explaining waste generation behavior. Population ageing contributes negatively to waste generation, while population density and the development dichotomy are not important drivers in this process. Finally, tourism inflows have a positive effect on municipal waste generation, although the size of the impact is minimal.

One of the major findings of this paper, which studied the multiplier effects of pensions received at each Portuguese municipality since 2003, is that pensions stimulate the incomes of municipalities. We studied these effects also considering the spillovers from/to the surrounding areas. After discussing several models of spatial analysis, we chose the Dynamic Spatial Durbin Model. Our results were obtained after considering a proper set of control variables.