Performance and its determinants in the Portuguese municipal solid waste utilities

The unprecedented population increase brings several consequences to the environment, including the rise of urbanization levels and municipal solid waste (MSW) production - one expects that it may reach 3.4 billion tons per year by 2050. This paper contributes to the debate of efficiency measurement of MSW utilities management using the Portuguese case study. Our objectives are twofold. First, we assess the efficiency levels of municipalities in MSW collection through the Data Envelopment Analysis model, choosing total costs, staff, and vehicles as inputs, and the quantity of MSW collected (selective and refuse waste) as outputs. The efficiency results point to an average inefficiency level of about 35% and potential cost savings of over €96 million yearly. Second, by using a set of fifteen performance indicators monitored by the regulatory agency, we evaluate their relationship with the efficiency of MSW utilities, through the order-m model. Our results suggest that, in opposition to the management model, the rural/urban nature of councils helps explain part of the inefficiency. In general, the conditional-to-unconditional efficiency ratios reached values statistically different from 1, meaning that those indicators help explaining their efficiency distribution and the benchmarks profile, and need to be considered in future performance analyses. Remarkable and influential indicators include the accessibility to the service (average ratio = 0.95), the recycling rate (0.94), the monetization of the vehicle fleet (0.92), the pollution resulting from greenhouse gas emissions of waste collection vehicles (0.81), and council size measured by the population or the number of households (0.47).