Incorporating the learning effect into data envelopment analysis to measure MSW recycling performance

The effect of organizational learning, which results in continuous improvement of organizational performance over time, has been widely discussed. The cumulative learning effect may form as a source of intellectual capital. Thus far, the static data envelopment analysis (DEA) model has not been used to examine the longitudinal learning effect. Therefore, a two-stage approach is developed together with the estimation of a latent learning effect using time-series data; the estimated learning effect is then used as an input in the DEA Slacks-Based Measure (SBM) model. The proposed DEA SBM model can be used to investigate the efficiency of the organizational learning effect of Municipal Solid Waste (MSW) recycling systems.