SUMMARYThe Seoul Metropolitan Government has introduced a quasi-public operational system since the public transport systems were reformed in July 2004. Thus, there has been controversy on moral hazards. A question addressed by researchers of transportation is the extent to which the public transport reforms have led to improvements in efficiency and productivity growth. The directional distance function and the Malmquist Luenberger Index, respectively, were used to investigate the impacts of public transport reforms on efficiency and productivity growth both with and without accident costs in Seoul's bus industry. The data cover 2003 and 2005; 2003 is the pre-reform year and 2005 is the post-reform year. It is found that the overall productivity increased a little regardless of the consideration of accident costs; it increased a little bit more in the presence of accident costs. This means that the overall productivity at least did not decrease and the level of service in terms of safety was improved following the public transport reforms.

The Seoul Government reformed local public transport systems in 2004 to reduce vehicle emissions as well as get bus transit agencies to operate more efficiently and improve bus service levels. In this study, using the directional distance function, the efficiency of bus transit agencies was examined both with and without the consideration of emissions to show the importance of public transportation reforms.The analysis included 59 Seoul urban bus transit agencies in June 2005. The results showed that the number of efficient agencies and the efficiency score rankings differed depending on whether or not emissions were considered. Meanwhile, contracted bus agencies that operated on tendered routes were found to be more efficient than the remainder, regardless of the reduction in emissions.

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