RE-EXAMINATION OF INEFFICIENCIES IN URBAN TRANSIT SYSTEMS: A STOCHASTIC FRONTIER APPROACH

The objective of this paper is to examine the inefficiency of local transit firms using a stochastic frontier approach. It builds upon previous work of Viton (1986) and estimates a stochastic production function and two relative cost equations. From the results, technical and allocative inefficiencies are calculated and related to input levels, output and subsidies. The general finding is that technical inefficiency is very small with transit firms producing outputs that are 5.7 percent below the production frontier, capital is sixty-eight percent overallocated relative to labor and 123 percent overallocated relative to fuel. Furthermore, technical inefficiency reduces with firm size and subsidies, and labor-capital allocative inefficiencies reduce with output and decrease with higher levels of subsidies.

  • Corporate Authors:

    University of British Columbia, Vancouver

    Faculty of Commerce and Business Administration
    Vancouver, British Columbia  Canada  V6T 1Z2
  • Authors:
    • Sakano, R
    • Obeng, K
  • Publication Date: 1995-12

Language

  • English

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00716615
  • Record Type: Publication
  • Files: TRIS, ATRI
  • Created Date: Feb 13 1996 12:00AM