IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Indirect production function and the output effect of public transit subsidies

  • K. Obeng

    ()

This paper uses an indirect production function to decompose the effects of subsidies on output into the lump-sum, cost and inefficiency effects. Using 2006 data for U.S. transit systems it estimates an indirect production function and uses the results to calculate these effects. It finds that the lump-sum effects exceed the other effects and that the average total effect of the subsidies is a 73.23% increase in output. The range of the output change shows that in many transit systems the subsidies more than double the outputs they produce. The paper suggests that reductions in allocative inefficiencies from the subsidies would result in very large increases in output.

(This abstract was borrowed from another version of this item.)

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10.1007/s11116-010-9296-7
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer in its journal Transportation.

Volume (Year): 38 (2011)
Issue (Month): 2 (March)
Pages: 191-214

as
in new window

Handle: RePEc:kap:transp:v:38:y:2011:i:2:p:191-214
DOI: 10.1007/s11116-010-9296-7
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/regional+science/journal/11116/PS2

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. KERSTENS, Kristiaan, 1995. "Technical efficiency measurement and explanation of French urban transit companies," SESO Working Papers 1995020, University of Antwerp, Faculty of Applied Economics.
  2. Stephen Schmidt, 2001. "Incentive Effects of Expanding Federal Mass Transit Formula Grants," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(2), pages 239-261.
  3. Cooter, Robert & Topakian, Gregory, 1980. "Political Economy of a Public Corporation: Pricing Objectives of BART," Empirical Economics, Springer, vol. 13(3), pages 299-318, June.
  4. DE BORGER, Bruno & KERSTENS, Kristiaan & COSTA, Álvaro, . "Public transit performance: What do we learn from frontier studies?," Working Papers 2000019, University of Antwerp, Faculty of Applied Economics.
  5. Kristiaan Kerstens & Philippe Vanden Eeckaut, 1999. "A new criterion for technical efficiency measures: non-monotonicity across dimensions axioms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 45-59.
  6. Mohring, Herbert, 1972. "Optimization and Scale Economies in Urban Bus Transportation," American Economic Review, American Economic Association, vol. 62(4), pages 591-604, September.
  7. Small, Kenneth A. & Gomez-Ibanez, Jose A., 1999. "Urban transportation," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 46, pages 1937-1999 Elsevier.
  8. Fare, R. & Grosskopf, S. & Lovell, C. A. K., 1988. "An indirect approach to the evaluation of producer performance," Journal of Public Economics, Elsevier, vol. 37(1), pages 71-89, October.
  9. Hilmer, Christiana E. & Holt, Matthew T., 2005. "Estimating Indirect Production Functions with a More General Specification: An Application of the Lewbel Model," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 37(03), pages 619-634, December.
  10. De Alessi, Louis, 1969. "Implications of Property Rights for Government Investment Choices," American Economic Review, American Economic Association, vol. 59(1), pages 13-24, March.
  11. Obeng, K., 2000. "Expense preference behavior in public transit systems," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 36(4), pages 249-265, December.
  12. Bruno De Borger & Kristiaan Kerstens & Álvaro Costa, 2002. "Public transit performance: What does one learn from frontier studies?," Transport Reviews, Taylor & Francis Journals, vol. 22(1), pages 1-38, January.
  13. Karlaftis, Matthew G. & McCarthy, Patrick, 2002. "Cost structures of public transit systems: a panel data analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 38(1), pages 1-18, January.
  14. Talley, Wayne K., 1988. "An economic theory of the public transit firm," Transportation Research Part B: Methodological, Elsevier, vol. 22(1), pages 45-54, February.
  15. Eric A. Hanushek, 1979. "Conceptual and Empirical Issues in the Estimation of Educational Production Functions," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 351-388.
  16. Cooter, Robert & Topakian, Gregory, 1980. "Political economy of a public corporation : Pricing objectives of BART," Journal of Public Economics, Elsevier, vol. 13(3), pages 299-318, June.
  17. Martijn Brons & Peter Nijkamp & Eric Pels & Piet Rietveld, 2005. "Efficiency of urban public transit: A meta analysis," Transportation, Springer, vol. 32(1), pages 1-21, January.
  18. Pina, Vicente & Torres, Lourdes, 2001. "Analysis of the efficiency of local government services delivery. An application to urban public transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(10), pages 929-944, December.
  19. Karlaftis, Matt G. & McCarthy, Patrick, 1998. "Operating subsidies and performance in public transit: an empirical study," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(5), pages 359-375, September.
  20. Hilmer, Christiana E. & Holt, Matthew T., 2005. "Estimating Indirect Production Functions with a More General Specification: An Application of the Lewbel Model," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(03), December.
  21. Nolan, J. F. & Ritchie, P. C. & Rowcroft, J. E., 2002. "Identifying and measuring public policy goals: ISTEA and the US bus transit industry," Journal of Economic Behavior & Organization, Elsevier, vol. 48(3), pages 291-304, July.
  22. Kumbhakar, Subal C., 1997. "Modeling allocative inefficiency in a translog cost function and cost share equations: An exact relationship," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 351-356.
  23. 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.
  24. Peran van Reeven, 2008. "Subsidisation of Urban Public Transport and the Mohring Effect," Journal of Transport Economics and Policy, University of Bath, vol. 42(2), pages 349-359, May.
  25. D. Fabbri, 1995. "Public Transit Subsidy: from the Economics of Welfare to the Theory of Incentives," Working Papers 220, Dipartimento Scienze Economiche, Universita' di Bologna.
  26. 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.
  27. Obeng, Kofi, 2010. "The Deadweight Costs of Operating and Capital Subsidies," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 49(1).
  28. Bokusheva, Raushan & Kumbhakar, Subal C., 2008. "Modelling Farms' Production Decisions Under Expenditure Constraints," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6641, European Association of Agricultural Economists.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kap:transp:v:38:y:2011:i:2:p:191-214. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

or (Rebekah McClure)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.