Measuring the wastewater treatment plants productivity change: Comparison of the Luenberger and Luenberger-Hicks-Moorsteen Productivity Indicators

Abstract

It is essential to assess the productivity of wastewater treatment plants (WWTPs) to improve their economic and technical performance over time. In doing so, reliable indexes should be used to avoid biased conclusions leading to unsuccessful policy and managerial measures. Ratio-based indexes are typically employed, but are infeasible when any of the variables are equal or close to zero. To overcome this limitation, this paper presents the innovative approach of applying and comparing two difference-based productivity indicators, Luenberger (LPI) and Luenberger-Hicks-Moorsteen (LHMPI), to evaluate how productivity changes in a sample of WWTPs. Because the LHMPI is an additively complete indicator, the contribution of operational costs (inputs) and pollutant removal efficiency (outputs) to changes in productivity was quantified. The results showed that, on average, LPI and LHMPI estimations were not statistically different, except for at WWTP level. Moreover, for most facilities, there was a trade-off between operational costs and pollutants removed from the wastewater. The results demonstrate that WWTP managers and regulators should focus on the indexes or indicators used to evaluate the performance of facilities to avoid making biased conclusions.