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Unobserved Heterogeneity and Efficiency Measurement in Public Transport

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  • Astrid Cullmann
  • Mehdi Farsi
  • Massimo Filippini

Abstract

Efficiency measurement in public transport requires an adequate account of unobserved network characteristics that are typically modelled as factors separable from the production process. This paper proposes a panel data model that allows for non-separable firm-specific heterogeneity in an input distance function. The proposed model is applied to a sample of German and Swiss urban transit companies operating from 1991 to 2006. The results underline the presence of non-separable unobserved factors and their effects on technological characteristics such as returns to scale. Moreover, the data suggest that the effect of time-invariant heterogeneity could be significantly greater than technical inefficiency. © 2012 LSE and the University of Bath

Suggested Citation

  • Astrid Cullmann & Mehdi Farsi & Massimo Filippini, 2012. "Unobserved Heterogeneity and Efficiency Measurement in Public Transport," Journal of Transport Economics and Policy, University of Bath, vol. 46(1), pages 51-66, January.
    • Handle: RePEc:tpe:jtecpo:v:46:y:2012:i:1:p:51-66
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    Cited by:

    1. Wegelin, Philipp, 2018. "Is the mere threat enough? An empirical analysis about competitive tendering as a threat and cost efficiency in public bus transportation," Research in Transportation Economics, Elsevier, vol. 69(C), pages 245-253.
    2. Cinzia Daraio & Marco Diana & Flavia Di Costa & Claudio Leporelli & Giorgio Matteucci & Alberto Nastasi, 2014. "Efficiency and effectiveness in the urban public transport sector: a critical review with directions for future research," DIAG Technical Reports 2014-14, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    3. Filippini, M. & Koller, M. & Masiero, G., 2015. "Competitive tendering versus performance-based negotiation in Swiss public transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 158-168.
    4. Massimo Filippini & Martin Koller, 2012. "Cost Efficiency Measurement in Postal Delivery Networks," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1206, USI Università della Svizzera italiana.

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