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Unobserved Heterogeneity and International Benchmarking in Public Trasport

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  • Cullmann, Astrid

    () (DIW Berlin (German Institute for Economic Research), Germany)

  • Farsi, Mehdi

    (Centre for Energy Policy and Economics (CEPE), Department of Management, Technology, and Economics, ETH Zürich, Switzerland)

  • Filippini Massimo

    (Istituto Mecop, Facoltà di Scienze economiche, Università della Svizzera italiana, Svizzera)

Abstract

We analyze the technical efficiency of German and Swiss urban public transport companies by means of SFA. In transport networks we might face different network structures or complexities, not observed, but influencing the production process. The unobserved factors are typically modeled as separable factors. However, we argue that the entire production process is organized around different network structures. Therefore, they are inevitably non-separable from the observed inputs and outputs. The adopted econometric model is a random coefficient stochastic frontier model. We estimate an input distance function for the years 1991 to 2006. The results underline the presence of unobserved non-separable factors.

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Bibliographic Info

Paper provided by USI Università della Svizzera italiana in its series Quaderni della facoltà di Scienze economiche dell'Università di Lugano with number 0904.

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Length: 33 pages
Date of creation: Jul 2009
Date of revision:
Handle: RePEc:lug:wpaper:0904

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Web page: http://www.library.lu.usi.ch

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Keywords: distance function; unobserved heterogeneity; technical efficiency; bus industry; panel data;

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