Cost efficiency in Swedish public transport

Over the last couple of years, costs in Swedish public transport have increased substantially, and there is little knowledge in what affects cost efficiency. This study aims at determining how different contractual and environmental factors affect cost efficiency, and whether cost efficiency differs between Public Transport Authorities (PTA). A stochastic frontier analysis is conducted using contract-level data for the 21 PTAs and year 2013. The main findings are that cost efficiency is lower if a contract is operating in areas with high population density, or if the traffic is supplied by a publicly owned operator without using competitive tendering. Furthermore, no major differences in cost efficiency are found across PTAs, with the exception of the counties of Stockholm and Skåne, both counties with high population density, and the county of Västmanland, where all public transport is provided without competitive tendering. The finding of lower cost efficiency in high-density areas calls for further investigation into why this is. Potential explanations are the need for higher peak capacity, or more complex transportation systems. Finally, usage of direct-awarding of public transport should be clearly motivated, as this affects cost efficiency negatively.