Cost Efficiency and Subsidization in German Local Public Bus Transit
AbstractThis paper examines the impact of endogenous deficit-balancing subsidies on the cost efficiency of local public bus companies by using alternative frontier cost models for panel data. Thereby, the multidimensional performance estimation incorporates the subsidy variable directly. The empirical analysis relies on a unique dataset of 33 German companies observed over a period of up to twelve years. We find a positive effect of endogenous subsidies on the standard deviation of cost inefficiency implying that the range of companies’ cost inefficiency increases with the level of subsidies relative to total costs. Further, we find that non-subsidized firms perform better.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9346.
Date of creation: Feb 2013
Date of revision:
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Find related papers by JEL classification:
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-EFF-2013-04-13 (Efficiency & Productivity)
- NEP-EUR-2013-04-13 (Microeconomic European Issues)
- NEP-REG-2013-04-13 (Regulation)
- NEP-TRE-2013-04-13 (Transport Economics)
- NEP-URE-2013-04-13 (Urban & Real Estate Economics)
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