Assessing the performance of industrial water resource utilization systems in China based on a two-stage DEA approach with game cross efficiency

Abstract

While shouldering the burden of economic development, China's industrial sector has significant water consumption and wastewater discharge, which has intensified the country's water shortage. To improve the efficiency of industrial water resource utilization system, data envelopment analysis (DEA) has been widely used to assess the performance of the system. The current network DEA approaches adopted to investigate the system all belong to the self-evaluation mode, and existing network DEA cross-efficiency evaluation approaches have shortcomings. Therefore, a two-stage DEA approach with game cross efficiency is proposed to evaluate the system. First, according to the operation process of the system, this paper decomposes the system into a general two-stage network structure: water use stage and wastewater treatment stage. Second, the DEA game cross-efficiency model is improved to the general two-stage DEA game cross-efficiency model to evaluate the overall efficiency of the system. Third, given the overall efficiency, an efficiency decomposition model is proposed to determine a set of weights for each decision-making unit to evaluate water use efficiency and wastewater treatment efficiency. Finally, the rationality of the proposed approach is illustrated by model comparison, and the efficiencies of industrial water resource utilization systems in 31 regions of China from 2010 to 2015 are evaluated based on the proposed approach. The results indicate that, from the overall efficiency perspective, no region in China is always evaluated as being overall efficient and the overall efficiencies of 17 regions show an increase before a decreasing trend or decreasing trend during the study period. In 11 regions, wastewater treatment efficiency is far lower than water use efficiency, and in 11 other regions, both sub-stages are inefficient. In terms of the three areas, the eastern area has the highest water use efficiency, the central area has the lowest efficiency of both sub-stages, and the western area has the highest wastewater treatment efficiency. Some recommendations are presented to ensure China's sustainable development.