Assessing standard costs in local public bus transport: Evidence from Italy

Avenali, Alessandro; Boitani, Andrea; Catalano, Giuseppe; D’Alfonso, Tiziana; Matteucci, Giorgio

doi:10.1016/j.tranpol.2016.06.007

Cited by 22 publications

(11 citation statements)

References 37 publications

(34 reference statements)

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“…Moreover, we observe that, in the considered cases, Model 1 provides a higher estimate of the total unit cost than Model 2. A possible interpretation of this results is that Model 1 aims at isolating the cost of the driving personnel which, indeed, represents the most important cost component [14], [15]. As opposite, in Model 2 such component is estimated together with other cost elements.…”

Section: Applicationmentioning

confidence: 88%

“…Actually, the unit cost of the fleet does include the unit cost of depots and related maintenance. However, this portion is negligible in our sample [14], [15];  the remaining portion of the unit cost, which is the ratio between the total cost (net of the cost of the fleet) and BRK. …”

Section: Model 1 Divides the Unit Cost Of Lpbt Services Inmentioning

confidence: 95%

“…The monetary value is the sum of all depreciations of owned vehicles (gross of non-repayable public contributions and adjusted by assuming a 15 years depreciation life) and rents/leasing for non-owned vehicles. This variable identifies a qualitative characteristic, which can be controlled by the LPT firm [14], [15];  average driver's salary (€). This variable denotes the yearly average salary per driver.…”

Section: Stepmentioning

confidence: 99%

“…The questionnaire has been later adopted by the national Observatory on Local Public Transport Policies. The resulting Dataset consists of a cross section of 54 instances, in the following referred to as service bundles [14], [15]. A service bundle is the set of one or more service contracts for which the firm is able to measure (only) jointly its direct and indirect costs.…”

Section: Stepmentioning

confidence: 99%

“…However, they do not focus on the definition and measurement of the standard cost. To the best of our knowledge, Avenali et al [14], [15] build a Top-Down model for the determination of unit standard costs for the provision of LPT bus services. They find that commercial speed is the most important cost driver, while economies of scale are low and limited to small sized service bunches.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Key-Cost Drivers Selection in Local Public Bus Transport Services Through Machine Learning

Avenali

Catalano

D’Alfonso

et al. 2017

WIT Transactions on the Built Environment

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This paper is aimed at developing a workable model for the identification of key-cost drivers in the Italian Local Public Bus Transport (LPBT) sector. Disaggregated information about costs, technical characteristics and environmental characteristics have been collected by means of questionnaires sent to LPBT companies producing more than 500 million bus revenue kilometres in Italy in 2011. A supervised regression model is built by training a regularized Artificial Neural Network in order to determine the quantitative and qualitative characteristics that contribute to explaining the variability of the driving personnel and the unit cost of the fleet (which usually covers more than 50% of the total economic cost) and the remaining portion of the unit cost. The proposed models could be an effective and simple tool for local authorities to validate reserve prices in tender procedures. Keywords: standard costs, local public transport, fiscal federalism, cost drivers, machine learning. INTRODUCTIONIn Italy, the Local Public Transport (LPT) industry reform bill (1997) touched upon two dimensions: the allocation of public funds to Regions -and, in turns, to Local Authorities (LAs) -as well as the definition of an upper bound to public compensations to LPT firms. Although the reform bill stated that all subsidized LPT services should have been tendered off by January 2004, later legislative interventions left discretion to local governments about whether tendering out concessions or adopting in-house provision. Some competitive tendering took place after 1998 [1]. However, at present, the amount of LPT services that are tendered off is negligible with respect to in house provision that still prevails, especially in large cities [2]. In recent years, a number of policy interventions reaffirmed the political aim to improve market-oriented mechanisms in the allotment of LPT services; moreover, several parliamentary acts established that the maximum economic compensation to LPT firms should be based on standard costs (Law number 135/2012). The standard cost is defined as the cost of a LPT service provided by a reasonably efficient operator given a pre-specified level of service quality. However, at present, the Italian policy makers have not yet promulgated an appropriate methodology for the calculation of unit standard costs.Our paper contributes to the literature since we develop two Top-Down cost models, based on recent advancements of machine learning approaches [3], in order to identify key cost drivers with respect to different cost items. The proposed models could be an effective and simple tool for LAs to validate reserve prices in tender procedures. Detailed information about costs has been gathered in order to fairly compute the total economic costs of the LPBT services; the collected economic and transport data relates to LPBT companies producing more than 500 million of bus revenue kilometers (BRK) in Italy in 2011 (approximately 30% of the overall amount of BRK offered in Italy for bus LPT services).Thi...

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Section: Applicationmentioning

confidence: 88%

Section: Model 1 Divides the Unit Cost Of Lpbt Services Inmentioning

confidence: 95%