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Concepts, methods and purposes of productivity measurement in transportation

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  • Oum, Tae H.
  • Tretheway, Michael W.
  • Waters, W. G.

Abstract

This paper discusses alternative concepts of productivity and methods of measurement. Different measures are appropriate for different questions. Partial factor productivity measures, such as the ever-popular labour productivity, are appropriate where disaggregate operational performance is of interest. Labour productivity is also the relevant measure for assessing the long term standard of living of a nation. Total Factor Productivity (TFP) is the appropriate concept for most productivity assessments, including comparisons across firms or inductries, or over time. TFP is alos relevant for pricing policies and for many public policy questions. However, TFP itself is an ambiguous concept. "Shift" measures of TFP measure productivity gains from fundamental changes in technology or managerial organization. Shift measures require statistical analysis via estimation of cost or production functions, or via some other decomposition of "gross" measures of TFP. Gross TFP measures productivity gains from all sources: whether due to technical (managerial) progress, or from exploitation of economies of scale, etc. Gross TFP measures are generally appropriate for pricing questions, while shift measures often are appropriate for government policy questions. The paper describes six alternative techniques for measuring gross TFP, and provides guidance as to which techniques might be preferred in a particular situation.

Suggested Citation

  • Oum, Tae H. & Tretheway, Michael W. & Waters, W. G., 1992. "Concepts, methods and purposes of productivity measurement in transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 26(6), pages 493-505, November.
    • Handle: RePEc:eee:transa:v:26:y:1992:i:6:p:493-505
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    Cited by:

    1. Lin, Zhuo & Choo, Yap Y. & Oum, Tae H., 2013. "Efficiency Benchmarking of North American Airports: Comparative Results of Productivity Index, Data Envelopment Analysis and Stochastic Frontier Analysis," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 52(1).
    2. Mulatu, Abay & Crafts, Nicholas, 2005. "Efficiency among private railway companies in a weakly regulated system: the case of Britain's railways in 1893-1912," Economic History Working Papers 22552, London School of Economics and Political Science, Department of Economic History.
    3. Zofío, Jose L. & Condeço-Melhorado, Ana M. & Maroto-Sánchez, Andrés & Gutiérrez, Javier, 2014. "Generalized transport costs and index numbers: A geographical analysis of economic and infrastructure fundamentals," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 141-157.
    4. Oum, Tae Hoon & Pathomsiri, Somchai & Yoshida, Yuichiro, 2013. "Limitations of DEA-based approach and alternative methods in the measurement and comparison of social efficiency across firms in different transport modes: An empirical study in Japan," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 57(C), pages 16-26.
    5. Pavlyuk, Dmitry, 2012. "Airport Benchmarking and Spatial Competition: a Critical Review," MPRA Paper 43391, University Library of Munich, Germany.
    6. Cavaignac, Laurent & Petiot, Romain, 2017. "A quarter century of Data Envelopment Analysis applied to the transport sector: A bibliometric analysis," Socio-Economic Planning Sciences, Elsevier, vol. 57(C), pages 84-96.
    7. Hensher, David A., 2007. "Bus transport: Economics, policy and planning," Research in Transportation Economics, Elsevier, vol. 18(1), pages 1-507, January.
    8. Hussain, Anwar & Maki, Wilbur R. & Olson, Douglas C. & Braslau, David, 1993. "The Changing Structure Of The Transportation Sector - An Input-Output Analysis," Staff Papers 13952, University of Minnesota, Department of Applied Economics.
    9. Kerstens, K., 1996. "Technical efficiency measurement and explanation of French urban transit companies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 30(6), pages 431-452, November.
    10. Rinki Sarkar, 1997. "Depicting The Cost Structure Of On Urban Bus Transit Firm," Working papers 50, Centre for Development Economics, Delhi School of Economics.
    11. Obeng, K. & Sakano, R., 2008. "Public transit subsidies, output effect and total factor productivity," Research in Transportation Economics, Elsevier, vol. 23(1), pages 85-98, January.
    12. Savage, Ian, 2004. "Management objectives and the causes of mass transit deficits," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(3), pages 181-199, March.
    13. Waters, II, W.G. & Tretheway, Michael W., 2000. "Labor Payouts, Productivity Measurement and the Price Cap Approach to Regulation," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 39(1).
    14. Laurent Cavaignac & Romain Petiot, 2016. "A Quarter Century of Data Envelopment Analysis Applied to the Transport Sector: A Bibliometric Analysis," Post-Print hal-02395215, HAL.
    15. Choo, Yap Yin & Oum, Tae Hoon, 2013. "Impacts of low cost carrier services on efficiency of the major U.S. airports," Journal of Air Transport Management, Elsevier, vol. 33(C), pages 60-67.
    16. Hensher, David A & Daniels, Rhonda, 1995. "Productivity measurement in the urban bus sector," Transport Policy, Elsevier, vol. 2(3), pages 179-194, July.
    17. Luisa Affuso & Alvaro Angeriz & Michael Pollitt, 2009. "The Impact of Privatisation on the Efficiency of Train Operation in Britain," Working Papers 28, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    18. Wu, Wei-Ming & Lin, Jenn-Rong, 2015. "Productivity growth, scale economies, ship size economies and technical progress for the container shipping industry in Taiwan," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 73(C), pages 1-16.
    19. Pedersen, Pål Andreas, 2003. "On the optimal fare policies in urban transportation," Transportation Research Part B: Methodological, Elsevier, vol. 37(5), pages 423-435, June.
    20. Wolf, Hartmut, 2001. "Network effects of bilaterals: implications for the German air transport policy," Journal of Air Transport Management, Elsevier, vol. 7(1), pages 63-74.

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