This paper considers railway operations in 23 European countries during 1995-2001, where a series of reform initiatives were launched by the European Commission, and analyses whether these reform initiatives improved the operating efficiency of the railways.Efficiency is measured using Multi-directional Efficiency Analysis, which enables investigation of how railway reforms affect the inefficiencies of specific cost drivers. The main findings are that the reform initiatives generally improve operating efficiency but potentially differently for different cost drivers. Specifically, the paper provides clear empirical evidence that accounting separation is important for improving operating efficiency for both material and staff costs, whereas other reforms only influenced one of these factors.

This paper deals with methods of measuring and analyzing efficiency in transport industry. The aim of the paper is to introduce and demonstrate the advantages of Multi-directional Efficiency Analysis (MEA) in case of cost data with limited substitution possibilities. For this purpose we reconsider the Norwegian bus data that has previously been analyzed using econometric models and Data Envelopment Analysis; Jørgensen, Pedersen and Solvoll (1995), Jørgensen, Pedersen and Volden (1997) and Odeck and Alkadi (2001). It is shown how, using MEA, it becomes possible to disaggregate inefficiency into different components corresponding to different types of cost generating variables and thereby provide both managers of the bus companies and policy makers with more detailed information on possible improvements of performance.

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This paper considers railway operations in 23 European countries during 1995-2001, where a series of reform initiatives were launched by the European Commission, and analyses whether these reform initiatives improved the operating efficiency of the railways.Efficiency is measured using Multi-directional Efficiency Analysis, which enables investigation of how railway reforms affect the inefficiencies of specific cost drivers. The main findings are that the reform initiatives generally improve operating efficiency but potentially differently for different cost drivers. Specifically, the paper provides clear empirical evidence that accounting separation is important for improving operating efficiency for both material and staff costs, whereas other reforms only influenced one of these factors.

No abstract