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How efficient and productive are road toll companies?: Evidence from Norway

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  • Odeck, James

Abstract

This article evaluates the technical efficiency of toll companies, i.e., how toll companies perform relative to each other, their productivity, and whether toll companies improve their efficiency from one year to the next relative to the best performers. The rationale for this study is that Norwegian road toll companies have been criticized for not being as efficient as they should; it has been claimed that some have very large operational costs compared to their peers and hence are inefficient. The framework for analysis is Data Envelopment Analysis and its subsequent Malmquist Productivity indices. The data are from the accounting period of 2001-2004 and contain information on 18 companies. The results show that: (1) there is a potential for efficiency increases of about 14%, (2) there are economies of scale in the industry in that larger companies (as measured by number of lanes served) tend to be more efficient compared to smaller companies, and (3) there has been a productivity increase in the sector of about 1%, and this progress is due more to companies employing a newer and more effective method for collecting funds and less to improving efficiency from one year to the next. Finally, these findings suggest that the Norwegian road authorities should consider reorganizing the toll sector such that the inherent economies of scale are utilized.

Suggested Citation

  • Odeck, James, 2008. "How efficient and productive are road toll companies?: Evidence from Norway," Transport Policy, Elsevier, vol. 15(4), pages 232-241, July.
  • Handle: RePEc:eee:trapol:v:15:y:2008:i:4:p:232-241
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    Cited by:

    1. Odeck, James, 2017. "Government versus toll funding of road projects – A theoretical consideration with an ex-post evaluation of implemented toll projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 98(C), pages 97-107.
    2. Leviäkangas, Pekka & Ojala, Lauri & Töyli, Juuso, 2016. "An integrated ecosystem model for understanding infrastructure PPPs," Utilities Policy, Elsevier, vol. 42(C), pages 10-19.
    3. Kerstens, Kristiaan & Van de Woestyne, Ignace, 2014. "Comparing Malmquist and Hicks–Moorsteen productivity indices: Exploring the impact of unbalanced vs. balanced panel data," European Journal of Operational Research, Elsevier, vol. 233(3), pages 749-758.
    4. Daniel Albalate & Jordi Rosell, 2016. "Persistent and transient efficiency on the stochastic production and cost frontiers – an application to the motorway sector," Working Papers XREAP2016-04, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2016.
    5. Welde, Morten & Odeck, James, 2011. "The efficiency of Norwegian road toll companies," Utilities Policy, Elsevier, vol. 19(3), pages 162-171.
    6. Oliveira Cruz, Carlos & Miranda Sarmento, Joaquim, 2017. "Horizontal bundling of infrastructure managers: The case of Portugal Infrastructure Company (roads and railways)," Transport Policy, Elsevier, vol. 55(C), pages 99-103.
    7. Julia Numrich & Sascha Ruja & Stefan Voß, 2012. "Global Navigation Satellite System based tolling: state-of-the-art," Netnomics, Springer, vol. 13(2), pages 93-123, July.
    8. Sarmento, Joaquim Miranda & Renneboog, Luc & Verga-Matos, Pedro, 2017. "Measuring highway efficiency : A DEA approach and the Malquist index," Other publications TiSEM 23264815-321e-45a3-83ee-9, Tilburg University, School of Economics and Management.
    9. Hamilton, Carl J., 2011. "Revisiting the cost of the Stockholm congestion charging system," Transport Policy, Elsevier, vol. 18(6), pages 836-847, November.
    10. repec:eee:transa:v:101:y:2017:i:c:p:73-85 is not listed on IDEAS
    11. Teodor HADA & Nicoleta BARBUTA-MISU & Teodora Maria AVRAM, 2016. "Financial CEMATT Method: a New Approach for Performance Assessment using Accounting Information," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 10-17.
    12. Welde, Morten, 2011. "Demand and operating cost forecasting accuracy for toll road projects," Transport Policy, Elsevier, vol. 18(5), pages 765-771, September.

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