Technical Efficiency Analysis of the Chinese Urban Transport Industry

Abstract

In order to measure the technical efficiency of the Chinese urban transport industry, a panel of input-output data of 31 cities (capital cities and municipalities) from 1999 to 2004 was selected. Based on an economic production theory, the stochastic frontier analysis method was adopted to model the technical efficiency trends of the transport industry. Model test results indicate the technical efficiency of the Chinese urban transport is significant. Quantitative analysis shows that passenger capacity growth is mainly due to vehicles' input and technical efficiency enhancement while a lack of technical progress hinders productivity enhancement. Generally speaking, the technical efficiency of the Chinese urban public transport industry has great scope for improvement. Cities with technical efficiency at the frontier should focus on technical progress, while cities with low efficient technology should focus on efficiency to narrow the gap. From the beginning of the 1980's, great effort and much capital have been put into urban public transport to meet the needs of China's economic development. At present, buses and trams are dominant in China's urban public transport system. They carry more than 80% of the city's passenger volume. But still many problems exist in China's public transport. Too much attention has been paid to the construction of roads and bus vehicle purchases with little concern for the software such as the technical input and management strengthening. The development of the public transport industry is in line with the principle of economic production theory and pursues growth efficiency. How to allocate resources reasonably, improve the efficiency and productivity of public transport industry has important policy