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Chapter 23 Data Envelopment Analysis (DEA) and Improving Container Port Efficiency

  • Cullinane, Kevin
  • Wang, Teng-Fei
Registered author(s):

    This chapter analyses the relevance of Data Envelopment Analysis (DEA) to the estimation of productive efficiency in the container port industry. Following an exposition of the DEA methodology, the many previous applications of the technique to the port industry are reviewed and assessed. The DEA technique is illustrated through a detailed example application using sample data relating to the world's leading container ports. The different DEA models give significantly different absolute results when based on cross-sectional data. However, efficiency rankings are rather similar. The efficiency estimated by alternative approaches, therefore, exhibits the same pattern of efficiency distribution, albeit with significantly different means. An analysis of panel data reveals that container port efficiency fluctuates over time, suggesting that the results obtained from an analysis of cross-sectional data may be misleading. Overall, the results reveal that substantial waste exists in container port production. It is also found that the sample ports exhibit a mix of decreasing, increasing and constant returns to scale. The chapter concludes that the optimum efficiency levels indicated by DEA results might not be achievable in reality, because each individual port has its own specific and unique context. Consequently, more singular aspects of individual ports should be investigated to determine the reasons that explain estimated efficiency levels.

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    Article provided by Elsevier in its journal Research in Transportation Economics.

    Volume (Year): 17 (2006)
    Issue (Month): 1 (January)
    Pages: 517-566

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    Handle: RePEc:eee:retrec:v:17:y:2006:i:1:p:517-566
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    1. Tulkens, H. & Vanden Eeckaut, P., . "Non-parametric efficiency, progress and regress measures for panel data: Methodological aspects," CORE Discussion Papers RP 1132, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    6. Cullinane Kevin & Song Dong-Wook & Ji Ping & Wang Teng-Fei, 2004. "An Application of DEA Windows Analysis to Container Port Production Efficiency," Review of Network Economics, De Gruyter, vol. 3(2), pages 1-23, June.
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    13. Carlos Pestana Barros & Manolis Athanassiou, 2004. "Efficiency in European Seaports with DEA: Evidence from Greece and Portugal," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 6(2), pages 122-140, June.
    14. Stigler, George J, 1976. "The Xistence of X-Efficiency," American Economic Review, American Economic Association, vol. 66(1), pages 213-16, March.
    15. Koop, Gary & Osiewalski, Jacek & Steel, Mark F J, 1999. " The Components of Output Growth: A Stochastic Frontier Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(4), pages 455-87, November.
    16. Cullinane, Kevin & Ji, Ping & Wang, Teng-fei, 2005. "The relationship between privatization and DEA estimates of efficiency in the container port industry," Journal of Economics and Business, Elsevier, vol. 57(5), pages 433-462.
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