Analyzing the Efficiency of County Road Production – Evidence from Eastern German Counties

Abstract

This study analyzes the efficiency of the road production by local governments using data envelopment analysis. The production of roads is a costly public service, which makes an efficiency analysis in this field an interesting subject. I enhance the previous literature, first, by examining the differences in the efficiencies of eastern German counties while considering the deformation of the pavement and foundation of roads, which previous studies have not included due to data limitations. Second, I use a unique dataset on road quality for my efficiency analysis and show that the efficiency levels differ from those in studies that apply proxies, such as the number of accidents, to capture the quality of roads. These findings indicate that there is a great need to develop reliable variables to describe government services. Additionally, I show that the correlations between efficiency levels and county characteristics vary greatly depending on the quality indicator used.

Ineffective fiscal rules? The effect of public sector accounting standards on budgets, efficiency, and accountability

“…Efficiency scores vary substantially and range from 11 to the maximum value of 100. The results are in line with recent studies on the efficiency of German county governments (see, for example,Fritzsche, 2018).…”

“…If resources are allocated more efficiently under accrual accounting, one would expect better quantity and quality of county roads to result in less congestion and fewer accidents. Accidents on county roads have been used as indicator of the quality of county infrastructure (see Kalb, 2014;Fritzsche, 2018). If accrual accounting improves the quality of local roads, this may well translate into fewer accidents.…”

Benchmarking Infrastructure Using Public Investment Efficiency Frontiers

“…Generally, outputs in efficiency analysis can be classified into three types: measures of quantity, of quality, and of utilization. Quantity is reflected, for example, in road length (Wheat, et al, 2019) or road area (Fritzsche, 2019), gigawatt-hours of electricity supply (Growitsch, et al, 2009), or length of railway routes (Kyriacou et al 2019). It is also common to include multiple outputs in the same efficiency analysis in order to reflect both quantity and quality of infrastructure, as done, for example, in IMF (2015) and Baum, et al (2020).…”

“…This is especially relevant in transport, where quality may be proxied by road condition indexes based on information about cracks, unevenness, etc. (Fritzsche, 2019), the share of paved roads (Kyriacou et al 2019), the number of accidents caused by bad road conditions (Kalb, 2014), the proportion of roads for which maintenance should be considered (Wheat, et al, 2019), the average speed of buses for bus transport efficiency (Pina and Torres, 2006), and the travel mean speed between large cities (Moszoro and Soto, 2022).…”

Economic Effects of Transportation Infrastructure Quantity and Quality: A Study of German Counties

“…Both studies build on historical infrastructure maps as instruments in order to identify causal effects. Another approach to public capital, which is close to the one we take in this study, is used by Fritzsche (2019): Instead of monetary values measuring the quantity of public infrastructure endowment, she uses a quality variable identifying the condition of roads for a sample of German counties. With these data, she finds that previously taken approaches such as instrumenting infrastructure quality with accident information (Kalb, 2014) are less reliable and measured quality data are necessary for consistent findings.…”