Identifying and measuring public policy goals: ISTEA and the US bus transit industry

Abstract

In 1991, the Intermodal Surface Transportation Efficiency Act (ISTEA) was passed in the US congress. The Act delineated a set of public objectives as a rationale for continued government funding and intervention in transit. This paper examines the extent to which urban transit agencies complied with the ISTEA requirements of both technical and social efficiency. To do this, we propose a method of measuring both technical and social efficiency using data envelopment analysis (DEA). We find that in general, urban transit agencies did not pursue the social objectives specified by ISTEA.