Analysing the efficiency of wastewater treatment plants: The problem of the definition of desirable outputs and its solution

Evaluating the efficiency of wastewater treatment plants (WWTPs) is highly relevant to improve their performance from an economic and environmental perspective. The issue is even more critical in countries where WWTPs are benchmarked to regulate water companies and define WWTPs' economic and environmental objectives. Despite the large number of previous studies on this topic, none has considered that the amount of outputs produced by the WWTPs is restricted by the concentration of pollutants in the effluent. To overcome this limitation, the study's main objective was to propose a new variant of the Weighted Russell Directional Distance Model (WRDDM) that would solve problems regarding the usual definition of desirable outputs and the impossibility of removing higher levels of pollutants than those contained in the effluent. To illustrate both the problem of the conventional efficiency assessment models and the usefulness of the alternative model proposed, an empirical application, focused on a sample of WWTPs located in Spain, was conducted. The comparison of the results obtained by the conventional WRDDM and the one proposed in this study demonstrated that WWTP efficiency scores are affected by output selection. Finally, it was shown that only the size of the WWTPs had a statistically significant impact on WWTPs' efficiency levels, suggesting that the plants' design and maintenance should be modified. The conclusions of this study are of great interest for water regulators: they demonstrate the importance of using robust models and variables when evaluating WWTP efficiency and they therefore support decision-making based on reliable results.