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Unobserved Heterogeneity and Efficiency Measurement in Public Transport

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  • Astrid Cullmann
  • Mehdi Farsi
  • Massimo Filippini

Abstract

Efficiency measurement in public transport requires an adequate account of unobserved network characteristics that are typically modelled as factors separable from the production process. This paper proposes a panel data model that allows for non-separable firm-specific heterogeneity in an input distance function. The proposed model is applied to a sample of German and Swiss urban transit companies operating from 1991 to 2006. The results underline the presence of non-separable unobserved factors and their effects on technological characteristics such as returns to scale. Moreover, the data suggest that the effect of time-invariant heterogeneity could be significantly greater than technical inefficiency. © 2012 LSE and the University of Bath

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Bibliographic Info

Article provided by London School of Economics and University of Bath in its journal Journal of Transport Economics and Policy (JTEP).

Volume (Year): 46 (2012)
Issue (Month): 1 (January)
Pages: 51-66

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Handle: RePEc:tpe:jtecpo:v:46:y:2012:i:1:p:51-66

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Web page: http://www.bath.ac.uk/e-journals/jtep

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Cited by:
  1. Massimo Filippini & Martin Koller, 2012. "Cost Efficiency Measurement in Postal Delivery Networks," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1206, USI Università della Svizzera italiana.

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