Evaluation of economies of scale in eco-efficiency of municipal waste management: an empirical approach for Chile

Abstract

In the circular economy context, improving the eco-efficiency of the management of municipal solid waste (MSW) occupies a prominent role. The aim of this study was to evaluate the eco-efficiency of MSW services provided by a sample of 142 Chilean municipalities using data envelopment analysis (DEA), a method that integrates both economic and environmental variables into a single performance index. This study also investigated whether the MSW facilities are affected by economies of scale. In a second stage of analysis, the effects of some exogenous variables on the eco-efficiency of MSW services were explored. The results demonstrated that 92.3% of the municipalities evaluated were not eco-efficient and presented notable room for improvement as the average eco-efficiency score was 0.58. In addition, 40.4% of the municipalities presented negative economies of scale; i.e. their operational size was not optimum and joint organization of MSW management systems should be promoted. Finally, the population served, population density, tourism and waste generated per capita were shown to have a significant impact on the eco-efficiency of MSW services. The results of this study will be beneficial for policymakers to formulate effective public policies to make the provision of MSW services more cost- and environmentally effective.