Spatial directional robust Benefit of the Doubt approach in presence of undesirable output: An application to Italian waste sector

Abstract This paper introduces a new composite indicator method integrating the spatial dependence into the robust directional model in the case of undesirable outputs. The proposed approach is advantageous compared to the traditional and conditional robust Benefit-of-the-Doubt (BoD) models in that it allows to compare the performance of individual units with local cluster of peers. The methodology has been tested on a very detailed database of Italian municipalities for the year 2015 in the municipal solid waste collection and processing sector and confirms the existence of strong local constraints linked to the disposal facilities planned by higher level Authorities.