Performance Measurement of Bus Routes Considering External Environmental Effects: Application of Three-Stage DEA Approach

Abstract

The performance measurement of bus systems is essential both for bus agencies and government subsidizers. This study applies three-stage data envelope analysis (DEA) approach as an alternative to traditional approaches to measure the performance of bus routes, considering the external environmental factors that are beyond the control of manager and stochastic noise. In addition, another crucial issue in this study is to investigate the impacts of the external environmental factors and stochastic noise on the performance of bus routes. By using a dataset consisting of 42 bus routes operated by Jiangyin Public Transportation Company in Jiangyin, China, the empirical results show that after adjusting the influences of the external environmental factors and stochastic noise, all the route technical efficiency scores significantly increase except for individual route. In particular, the results of the stochastic frontier analysis (SFA) uncover that all the external environmental factors have statistically significant influences on the performance of bus routes in our samples. The findings also indicate that inner city routes and longer route length are in a favorable environment, while an increase in the number of intersections would increase all the inputs of labor expenses, fuel expenses, depreciation, and maintenance expenses, and an increase in the priority lanes length would reduce all three inputs. Finally, the empirical results show that the influence of managerial inefficiency plays a major role in the use of all three inputs.