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How efficient and productive are road toll companies?: Evidence from Norway

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  • Odeck, James
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    Abstract

    This article evaluates the technical efficiency of toll companies, i.e., how toll companies perform relative to each other, their productivity, and whether toll companies improve their efficiency from one year to the next relative to the best performers. The rationale for this study is that Norwegian road toll companies have been criticized for not being as efficient as they should; it has been claimed that some have very large operational costs compared to their peers and hence are inefficient. The framework for analysis is Data Envelopment Analysis and its subsequent Malmquist Productivity indices. The data are from the accounting period of 2001-2004 and contain information on 18 companies. The results show that: (1) there is a potential for efficiency increases of about 14%, (2) there are economies of scale in the industry in that larger companies (as measured by number of lanes served) tend to be more efficient compared to smaller companies, and (3) there has been a productivity increase in the sector of about 1%, and this progress is due more to companies employing a newer and more effective method for collecting funds and less to improving efficiency from one year to the next. Finally, these findings suggest that the Norwegian road authorities should consider reorganizing the toll sector such that the inherent economies of scale are utilized.

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    Bibliographic Info

    Article provided by Elsevier in its journal Transport Policy.

    Volume (Year): 15 (2008)
    Issue (Month): 4 (July)
    Pages: 232-241

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    Handle: RePEc:eee:trapol:v:15:y:2008:i:4:p:232-241

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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Jonathan Cowie & Darinka Asenova, 1999. "Organisation form, scale effects and efficiency in the British bus industry," Transportation, Springer, Springer, vol. 26(3), pages 231-248, August.
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    14. C. Lovell, 2003. "The Decomposition of Malmquist Productivity Indexes," Journal of Productivity Analysis, Springer, Springer, vol. 20(3), pages 437-458, November.
    15. Odeck, James, 2006. "Congestion, ownership, region of operation, and scale: Their impact on bus operator performance in Norway," Socio-Economic Planning Sciences, Elsevier, Elsevier, vol. 40(1), pages 52-69, March.
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    Cited by:
    1. Welde, Morten, 2011. "Demand and operating cost forecasting accuracy for toll road projects," Transport Policy, Elsevier, Elsevier, vol. 18(5), pages 765-771, September.
    2. Julia Numrich & Sascha Ruja & Stefan Voß, 2012. "Global Navigation Satellite System based tolling: state-of-the-art," Netnomics, Springer, Springer, vol. 13(2), pages 93-123, July.
    3. Welde, Morten & Odeck, James, 2011. "The efficiency of Norwegian road toll companies," Utilities Policy, Elsevier, Elsevier, vol. 19(3), pages 162-171.
    4. Kerstens, Kristiaan & Van de Woestyne, Ignace, 2014. "Comparing Malmquist and Hicks–Moorsteen productivity indices: Exploring the impact of unbalanced vs. balanced panel data," European Journal of Operational Research, Elsevier, Elsevier, vol. 233(3), pages 749-758.
    5. Hamilton, Carl J., 2011. "Revisiting the cost of the Stockholm congestion charging system," Transport Policy, Elsevier, Elsevier, vol. 18(6), pages 836-847, November.

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