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Productivity Growth in European Railways: Technological Progress,Efficiency Change and Scale Effects

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Author Info
Heike Wetzel () (Institute of Economics, University of Lüneburg)

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Abstract

This paper analyzes the performance of the European railway sector in the period of deregulation (1990-2005). Using a stochastic frontier panel data model that controls for unobserved heterogeneity a multiple-output multiple input distance function model is estimated in order to evaluate the sources of productivity growth: technological progress, technical efficiency change and scale effects. The results indicate that technology improvements were by far the most important driver of productivity growth, followed by gains in technical efficiency, and to a lesser extent by exploitation of scale economies. Overall, we find an average productivity growth of 39 per cent within the sample period.

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Publisher Info
Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 101.

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Length: 31 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:lue:wpaper:101

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Related research
Keywords: European railways; Deregulation; Stochastic frontier analysis; Total factor productivity;

Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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  1. John Loizides & Efthymios G. Tsionas, 2004. "Dynamic Distributions of Productivity Growth in European Railways," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 38(1), pages 45-75, January. [Downloadable!] (restricted)
  2. William Greene, 2002. "Fixed and Random Effects in Stochastic Frontier Models," Working Papers 02-16, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
  3. Loizides, John & Tsionas, Efthymios G., 2002. "Productivity growth in European railways: a new approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 36(7), pages 633-644, August. [Downloadable!] (restricted)
  4. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August. [Downloadable!] (restricted)
  5. David Saal & David Parker & Tom Weyman-Jones, 2007. "Determining the contribution of technical change, efficiency change and scale change to productivity growth in the privatized English and Welsh water and sewerage industry: 1985–2000," Journal of Productivity Analysis, Springer, vol. 28(1), pages 127-139, October. [Downloadable!] (restricted)
  6. William Greene, 2004. "Distinguishing between heterogeneity and inefficiency: stochastic frontier analysis of the World Health Organization's panel data on national health care systems," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 959-980. [Downloadable!]
    Other versions:
  7. Coelli, Tim & Perelman, Sergio, 1999. "A comparison of parametric and non-parametric distance functions: With application to European railways," European Journal of Operational Research, Elsevier, vol. 117(2), pages 326-339, September. [Downloadable!] (restricted)
  8. Gathon, H. -J. & Pestieau, P., 1995. "Decomposing efficiency into its managerial and its regulatory components: The case of European railways," European Journal of Operational Research, Elsevier, vol. 80(3), pages 500-507, February. [Downloadable!] (restricted)
  9. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June. [Downloadable!] (restricted)
  10. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July. [Downloadable!] (restricted)
  11. Mehdi Farsi & Massimo Filippini & William Greene, 2005. "Efficiency Measurement in Network Industries: Application to the Swiss Railway Companies," Journal of Regulatory Economics, Springer, vol. 28(1), pages 69-90, 07. [Downloadable!] (restricted)
  12. Coelli, Tim & Perelman, Sergio, 2000. "Technical Efficiency of European Railways: A Distance Function Approach," Applied Economics, Taylor and Francis Journals, vol. 32(15), pages 1967-76, December. [Downloadable!] (restricted)
  13. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June. [Downloadable!] (restricted)
  14. Mehdi Farsi & Massimo Filippini, 2006. "An Analysis of Efficiency and Productivity in Swiss Hospitals," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 142(I), pages 1-37, March. [Downloadable!]
  15. Pedro Cantos & José Pastor & Lorenzo Serrano, 1999. "Productivity, efficiency and technical change in the European railways: A non-parametric approach," Transportation, Springer, vol. 26(4), pages 337-357, November. [Downloadable!] (restricted)
  16. Subal Kumbhakar & Luis Orea & Ana Rodríguez-Álvarez & Efthymios Tsionas, 2007. "Do we estimate an input or an output distance function? An application of the mixture approach to European railways," Journal of Productivity Analysis, Springer, vol. 27(2), pages 87-100, April. [Downloadable!] (restricted)
  17. Andrikopoulos, Andreas A & Loizides, John, 1998. "Cost Structure and Productivity Growth in European Railway Systems," Applied Economics, Taylor and Francis Journals, vol. 30(12), pages 1625-39, December. [Downloadable!] (restricted)
    Other versions:
  18. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-74, October.
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