Using Weighted Data Envelopment Analysis to Measure Occupational Safety and Healthy Economic Performance of Taiwan’s Industrial Sectors

Abstract

The socioeconomic costs of occupational accidents represent an important factor in the safety and healthy development of a country’s economy. Insurance payments (which cover workplace incidents, such as wounds or illness, disability and fatality) can be considered a proxy for the socioeconomic cost of occupational accidents. Occupational accidents in different industries cause important variations in these three socioeconomic costs—for example, in their frequency and severity. One of the most commonly used mathematical programming approaches that analyze the performance of inputs, economic outputs and occupational accidents is data envelopment analysis (DEA), which has also been used in recent years to estimate the relative performance related to occupational injuries. This study measures the safety and healthy economic performance of Taiwan’s 17 industrial sectors by incorporating the varying importance of the three socioeconomic costs of occupational accidents into a weighted DEA Model. The empirical results demonstrate that integrating the varying importance of the three socioeconomic costs of occupational accidents in the evaluation of safety and healthy economic performance is very important. To improve the occupational safety and healthy economic performance of Taiwan’s main industrial sectors, efforts should focus on reducing fatalities, which are very costly. These findings could help Taiwan’s policy makers effectively improve their safety and healthy economic performance, based on the specific context of each industry, especially the mining and quarrying industry.