Cost Efficiency Measurement of Bus Routes by Stochastic Cost Frontier Method

The cost efficiency measurement of bus routes is essential for the regulators to establish an effective subsidy mechanism. This study endeavours to incorporate the heterogeneous outputs and operating environment factors into the cost efficiency measurement framework by stochastic cost frontier method. In addition, it introduces four new operating environment factors at the microscopic level. The purpose is to impartially measure the cost efficiency of bus routes, so as to provide a useful practical tool with regard to the establishment of subsidy mechanism for the regulators. An empirical analysis based on 39 routes operated in Jiangyin City, China has been presented. The principal finding is that, generally, the increase in vehicle kilometers, fixed inputs, and fuel price, results in higher total operating costs of bus routes. Specially, vehicle kilometers have a bigger impact on total operating costs than other parameters. Additionally, route length, the percentage of priority lanes, and average pure operating speed are favorable for the improvement of cost efficiency. The average intersection density, average bus stop density, and average dwell time per bus stop are unfavorable for the improvement of cost efficiency. Finally, the measurement of the cost efficiency enables to identify the difference between the actual total operating costs and efficient total operating costs at the bus routes level. The results could substantially support the regulators in improving bus service design, especially establishing of an effective subsidy mechanism based on efficient total operating costs.

• Supplemental Notes:
  • This paper was sponsored by TRB committee AP010 Transit Management and Performance
• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Zhu, Weiquan
  • Yang, Xiaoguang
  • Bao, Lixia
  • Zhang, Yanling
• Conference:
  • Transportation Research Board 91st Annual Meeting
  • Location: Washington DC, United States
  • Date: 2012-1-22 to 2012-1-26
• Date: 2012

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References; Tables;
• Pagination: 17p
• Monograph Title: TRB 91st Annual Meeting Compendium of Papers DVD

Subject/Index Terms

• TRT Terms: Bus routes; Bus transit operations; Cost effectiveness; Economic efficiency; Operating costs; Operating subsidies
• Uncontrolled Terms: Stochastic frontier models
• Geographic Terms: China
• Subject Areas: Economics; Passenger Transportation; Public Transportation; I10: Economics and Administration;

Filing Info

• Accession Number: 01371535
• Record Type: Publication
• Report/Paper Numbers: 12-2774
• Files: TRIS, TRB
• Created Date: May 30 2012 3:02PM