Production and safety efficiency evaluation in Chinese coal mines: accident deaths as undesirable output

Coal mining is one of the highest-risk industries in China. Accident deaths in coal mines attract intense concern every year. This is the first attempt to measure production efficiency of coal mines with consideration of accident deaths. A combined directional distance function and slacks-based model is proposed to assess production and safety efficiency across 18 coal-mining provinces in China. Results showed that the average total factor humanitarian-production efficiency is poor, with nearly half of production potential unexploited. Safety efficiency is also low, and half of the deaths would be avoided if all coal enterprises operated at fully efficient levels. The directional contribution analysis pointed out that southern provinces should pay more attention to accident deaths than northern ones, while the importance of reducing accident death in efficiency promotion declined for nearly all provinces, which creates a tradeoff between safety and efficiency for enterprises and regulators. The results of this study showed that the safety situation of coal mines is not as optimistic as the official data suggest. Effective prevention mechanisms are urgently needed to prevent disastrous accidents in coal mines in China.