Measuring efficiency in the public sector using nonparametric frontier estimators: a study of transit agencies in the USA

Abstract

Transit agencies in the USA must provide service under increasing operating constraints. Using data from 1989-1993, technical efficiency among these firms is estimated and characteristics indicative of differential efficiency in transit agencies are identified. This paper verifies the robustness of the second step regression results to the choice of efficiency measure by comparing results of the two step regressions using a pair of non-parametric efficiency estimators. It is discovered that the structure of government subsidy to this industry negatively affects not just cost efficiency, but technical efficiency as well. Furthermore, maintenance appears to be an important component of operational efficiency in this industry.

Evaluating the comparative efficiency of urban mass transit systems: a longitudinal analysis of the Ohio case

“…He discovered that cost figures per passenger trip by non-profit and publicly owned mass transit services were seriously underestimated and did not truly reflect the actual costs or the cost efficiency of mass transit services provided. The study by Nolan, Ritchie, and Rowcroft (2001) was one of the first to propose a data envelopment analysis (DEA) to measure the comparative operational efficiency of the 25 selected mass transit systems in the USA. They also identified various factors influencing mass transit efficiency using the Tobit regression analysis.…”

Efficiency and effectiveness in the urban public transport sector: A critical review with directions for future research

“…We observe in fact that most of those that applied a two stage approach (e.g. Kerstens, 1996;Nolan, 1996;Nolan et al 2001;Pina and Torres, 2001;Cowie, 2002;Boame, 2004;Tsamboulas, 2006;Soderberg, 2009) did not…”

Performance assessment of transport services with the ERM-NDEA model: evidence from a domestic airline in Taiwan

“…Some of those studies focus on PE (e.g. Tulkens 1993, Oben 1994, Kerstens 1996, Nolan et al 2001, Cowie 2002, Karlaftis 2003, Graham 2008, while some are interested in the measurement of OE (e.g. Tofallis 1997, Cowie and Asenova 1999, Adler and Golany 2001, Boame 2004, Yu 2007, and others invested both in a single model (e.g.…”

“…Note, however, that PM is a consumption-based output measure, and thus is inappropriate for studies of technical efficiency (Nolan et al 2001). Another class of papers is concerned with separate production processes and company-wide operational performance, considering a situation where a transport agency and its individual production processes face different production technologies.…”