Productive efficiency and regulatory reform: The case of vehicle inspection services
AbstractMeasuring productive efficiency provides information on the likely effects of regulatory reform. We present a Data Envelopment Analysis (DEA) of a sample of 38 vehicle inspection units under a concession regime, between the years 2000 and 2004. The differences in efficiency scores show the potential technical efficiency benefit of introducing some form of incentive regulation or of progressing towards liberalization. We also compute scale efficiency scores, showing that only units in territories with very low population density operate at a sub-optimal scale. Among those that operate at an optimal scale, there are significant differences in size; the largest ones operate in territories with the highest population density. This suggests that the introduction of new units in the most densely populated territories (a likely effect of some form of liberalization) would not be detrimental in terms of scale efficiency. We also find that inspection units belonging to a large, diversified firm show higher technical efficiency, reflecting economies of scale or scope at the firm level. Finally, we show that between 2002 and 2004, a period of high regulatory uncertainty in the sample’s region, technical change was almost zero. Regulatory reform should take due account of scale and diversification effects, while at the same time avoiding regulatory uncertainty.
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Bibliographic InfoPaper provided by Xarxa de Referència en Economia Aplicada (XREAP) in its series Working Papers with number CREAP2006-02.
Length: 29 pages
Date of creation: Sep 2006
Date of revision: Sep 2006
Contact details of provider:
Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques i Empresarials, Universitat de Barcelona, c/ Tinent Coronel Valenzuela, 1-11, 08034 Barcelona
Web page: http://www.pcb.ub.edu/xreap
More information through EDIRC
Productive Efficiency; Regulatory Reform; Vehicle Inspections.;
Other versions of this item:
- Francesc Trillas & Daniel Montolio & Néstor Duch, 2011. "Productive Efficiency And Regulatory Reform: The Case Of Vehicle Inspection Services," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 19(1), pages 33-59, Spring.
- Francesc Trillas & Daniel Montolio & Néstor Duch, 2006. "Productive efficiency and regulatory reform: The case of vehicle inspection services," Working Papers 2006/3, Institut d'Economia de Barcelona (IEB).
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Government Policy; Regulatory Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-12 (All new papers)
- NEP-EFF-2007-05-12 (Efficiency & Productivity)
- NEP-REG-2007-05-12 (Regulation)
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