A Two-Stage Efficiency Analysis Applied to Brazilian Sanitation Services Providers

Abstract

This paper presents a comprehensive efficiency analysis of sanitation services providers in Brazil, a country where there is a significant need to improve access to basic sanitation for a considerable proportion of the population. The approach takes the form of a two-stage structure, which has been developed as a means of modelling the production process. The approach adopts a two-stage structure to model the production process: I. Service provision and II. Market monetization. Stage I includes two sub-processes: I.1. Infrastructure availability and maintenance and I.2. infrastructure utilization for service provision. In this model structure, the outputs of one stage serve as inputs for the subsequent stage. In order to assess the efficiency of basic sanitation service providers by stages, the Network Data Envelopment Analysis (NDEA) methodology was employed, using data from the National Sanitation Information System (SNIS) for the period between 2018 and 2021. This paper makes a valuable contribution to the field by identifying potential areas for improvement and trade-offs between efficiency scores at different stages and subprocesses. The results could inform strategies to enhance sectoral efficiency, identify best practices, and optimize operational processes.