The privatization effect of MSW incineration services by using data envelopment analysis

This paper attempts to compare the relative efficiency across MSW incineration facilities under the three operating modes including government-owned government-operated (GOO), government-owned private-operated (GOPO), and private-owned private-operated (POPO) by using the Data Envelopment Analysis (DEA), and to examine the factor in affecting the efficiency variation. The results show that technical efficiency scores are 0.7538, 0.9046 and 0.9917 for GOO, GOPO and POPO, respectively. An ANOVA is conducted and the analysis result confirms that the operating mode has significant impact on technical efficiencies. A further examination on the operating contracts signed between governments and operating firms of GOPO facilities finds that both the price protection and quantity protection also play vital roles in affecting efficiencies.

► This paper finds that operating modes and competition levels play vital roles in affecting efficiency scores.
► The private-owned and private-operated mode has the highest efficiency, ahead of other operating modes.
► High price protection (contracted price) helps enhance improvements in efficiencies.
► High quantity protection (minimum order contracted) assures of high efficiency at incineration stage.