Abstract
This paper measures the technical efficiency of 54 public road transport operators and investigates the degree to which various factors influence efficiency levels in these firms. The study makes an attempt to provide an overview of the general status of different operators in 18 countries. Stochastic Frontier Analysis (SFA) methods are applied to our sample over a twelve year period from 2000 to 2011. To our knowledge, this is the first comprehensive analysis of technical efficiency of public road transport operators in 18 countries using parametric method. Our empirical results indicate that investment, operating profit and firm size have a significant influence on technical efficiency levels. We find that technical efficiency level of public road transport operators varies between 0.458 and 0.95. We also observe that large-size operators with more investment capacity tend to be more technically efficient than small-size operators. Finally, we find that operators from developed countries are technically more efficient than those of developing countries.
Highlights
In recent years, the economic growth of developing countries has led to an expansion of urban cities
The aim of this paper is to assess the efficiency of 54 public transport operators in different countries between 2000 and 2011, using the Stochastic Frontier Analysis (SFA) of the production function model specified by Battese and Coelli (1995) for panel data
The essential concept of SFA is that the error term is composed of two parts: one unilateral component that captures the effects of the relative inefficiency of the stochastic frontier, and a symmetric component that allows a random variation of the frontier between companies and includes the effects of measurement error, other statistical noise, and random error
Summary
The economic growth of developing countries has led to an expansion of urban cities Road transport is the primary mode of transport, linking remote areas with the rest of the country (Agarwal et al 2010). In the absence of a transport system, dependency on personalised modes of transport increases leading to waste of energy Public road transport operators of passenger vehicles offer a public service with a social aim. In most cases, they are controlled by the government. Efficiency evaluation in public transportation is an issue of foremost importance
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