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Advisor(s)
Abstract(s)
Key performance indicators (KPI) are widely used tools to evaluate the economic (in)efficiency
of services, including the ones devoted to urban solid waste management. Regulatory exercises
are, then, mostly based on the outputs from KPIs, raising some questions about their validity.
In theory, other more appropriate tools could be used to estimate those efficiency levels. This study
evaluates the economic inefficiency level of urban solid waste management services in Portugal
(2010–2017) through the adoption of partial frontier benchmarking models (order-m) coupled with
weight restrictions. That way, the constructed model can evaluate the performance of those services
under some regulatory and sustainability requirements. Then, estimated efficiency levels and some
common KPIs are compared in order to understand if the latter are sufficient to explain the economic
efficiency. The novelty of this research lies in two main aspects: (a) the utilization of a robust order-α
model coupled with weight restrictions linked to regulatory and sustainability impositions to estimate
efficiency, and (b) the comparison of economic efficiency and some commonly used KPIs, including
waste fractions and recycling rate. Results point towards efficiency distributions that follow Weibull
functions, with the average close to 50%; thus, nearly half of the resources have been well spent
in municipal solid waste management services since 2010 onwards. Nonetheless, in an efficient
system, that average would be close to 100%. Additionally, the considered management related
KPIs do not exhibit any relationship with economic efficiency, which means that their interpretation
and usefulness for regulatory issues are both limited and should be used carefully. In other words,
those KPIs are not good performance drivers and carry no capacity to explain economic (in)efficiency
in urban solid waste management services.
Description
Keywords
urban solid waste treatment; key performance indicators; economic efficiency; regulatio
Pedagogical Context
Citation
Cunha Ferreira, D., Cunha Marques, R., Pedro, M. I., & Amaral, C. (2020). Economic Inefficiency Levels of Urban Solid Waste Management Services in Portugal. Sustainability, 12(10), 4170. MDPI AG. Retrieved from http://dx.doi.org/10.3390/su12104170
Publisher
MDPI