Efficiency Evaluation in Public Road Transport: A Stochastic Frontier Analysis

Abstract

This paper measures the technical efficiency of 54 public road transport operators and investigates the degree to which various factors influence efficiency levels in these firms. The study makes an attempt to provide an overview of the general status of different operators in 18 countries. Stochastic Frontier Analysis (SFA) methods are applied to our sample over a twelve year period from 2000 to 2011. To our knowledge, this is the first comprehensive analysis of technical efficiency of public road transport operators in 18 countries using parametric method. Our empirical results indicate that investment, operating profit and firm size have a significant influence on technical efficiency levels. We find that technical efficiency level of public road transport operators varies between 0.458 and 0.95. We also observe that large-size operators with more investment capacity tend to be more technically efficient than small-size operators. Finally, we find that operators from developed countries are technically more efficient than those of developing countries.

Technical Efficiency Evaluation: Study on Malaysian Electrical and Electronics Firms

“…There are a number of previous studies involving some industries to estimate TE using firms' data including Le and Harvie (2010), Essmui et al (2013), and Fahmy-Abdullah et al (2018). Jarboui et al (2015) emphasised that TE estimates using firm data as individuals are better as further analysis of factors affecting TE levels can be studied. Value of TE is often obtained using parametric and non-parametric approaches.…”

“…The SFA approach gives more advantages as it is possible to identify inconsistent data when the analysis is conducted and easily adapted to the environmental variables (Coelli et al, 2005;. In addition, random shocks which have an impact on production can be identified (Jarboui et al, 2015).…”

Efficiency of Urban Bus Companies in India: A Stochastic Frontier Analysis

“…Non-substitutable inputs may lead to inefficient firms reported as efficient ones. Also, if we have large number of inputs and outputs, firms' efficiency scores are likely to be higher [19].…”

“…Various studies have examined the inefficiency determinants, but they have tendency to focus on the variables such as market organization, regulatory system, network characteristics, etc. which are outside the firm's control [19]. In most cases, bus operators are unable to act on these determinants to improve their efficiency.…”

Measuring the efficiency of standardisation policy using meta-frontier analysis: a case of mobile platform standardisation

“…Specifically, operating expenses are frequently utilised as an input factor in studies related to the Internet and information and communication technology companies (e.g., Ho and Wu, 2009;Li and Pittman, 2012;Li and Price, 2011;Mannino, Hong and Choi, 2008;Serrano-Cinca, Fuertes-Callen and Mar-Molinero, 2005;Yang and Chang, 2009). In service industries, operating expenses are often used (e.g., Jarboui, Forget and Boujelbene, 2013). Particularly, because operating expenses can affect companies providing information goods such as online products (VanHoose, 2011), they are chosen as one of input factors.…”