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Transit costs and cost efficiency: Bootstrapping non-parametric frontiers

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  • DE BORGER, Bruno
  • KERSTENS, Kristiaan
  • STAAT, Matthias

Abstract

This paper explores a selection of recently proposed bootstrapping techniques to estimate non-parametric convex (DEA) cost frontiers and efficiency scores for transit firms. Using a sample of Norwegian bus operators, the key results can be summarised as follows: (i) the bias implied by uncorrected cost efficiency measures is numerically important (close to 25%), (ii) the bootstrapped-based test rejects the constant returns to scale hypothesis (iii) explaining patterns of efficiency scores using a two-stage bootstrapping approach detects only one significant covariate, in contrast to earlier results highlighting, e.g., the positive impact of high-powered contract types. Finally, comparing the average inefficiency obtained for the Norwegian data set with an analogous estimate for a smaller French sample illustrates how the estimated differences in average efficiency almost disappear once sample size differences are accounted for.

Suggested Citation

  • DE BORGER, Bruno & KERSTENS, Kristiaan & STAAT, Matthias, 2008. "Transit costs and cost efficiency: Bootstrapping non-parametric frontiers," Working Papers 2008012, University of Antwerp, Faculty of Applied Economics.
  • Handle: RePEc:ant:wpaper:2008012
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    Cited by:

    1. Matthias Walter, 2011. "Some Determinants of Cost Efficiency in German Public Transport," Journal of Transport Economics and Policy, University of Bath, vol. 45(1), pages 1-20, January.
    2. Daraio, Cinzia & Diana, Marco & Di Costa, Flavia & Leporelli, Claudio & Matteucci, Giorgio & Nastasi, Alberto, 2016. "Efficiency and effectiveness in the urban public transport sector: A critical review with directions for future research," European Journal of Operational Research, Elsevier, vol. 248(1), pages 1-20.
    3. Georgiadis, Georgios & Politis, Ioannis & Papaioannou, Panagiotis, 2014. "Measuring and improving the efficiency and effectiveness of bus public transport systems," Research in Transportation Economics, Elsevier, vol. 48(C), pages 84-91.
    4. Galina Besstremyannaya & Jaak Simm & Sergei Golovan, 2017. "Robust estimation of cost efficiency in non-parametric frontier models," Working Papers w0244, Center for Economic and Financial Research (CEFIR).
    5. Cinzia Daraio & Marco Diana & Flavia Di Costa & Claudio Leporelli & Giorgio Matteucci & Alberto Nastasi, 2014. "Efficiency and effectiveness in the urban public transport sector: a critical review with directions for future research," DIAG Technical Reports 2014-14, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    6. Perdomo Calvo, Jorge Andrés, 2014. "An Economics Approach to Fixing the Fare of the Parking Lot Service in Bogotá Using Price Cap Regulation," MPRA Paper 79614, University Library of Munich, Germany.
    7. Walter Briec & Kristiaan Kerstens & Ignace Van de Woestyne, 2013. "Nonparametric cost and revenue functions under constant economies of scale: An enumeration approach for the single output or input case," Working Papers 2013-ECO-22, IESEG School of Management.
    8. Jorge Andrés Perdomo Calvo & Mariana Rubio, 2012. "Regulación económica para la tarifa de parqueaderos en Bogotá mediante precios máximos," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID, December.
    9. Briec, Walter & Kerstens, Kristiaan & Van de Woestyne, Ignace, 2011. "Nonparametric cost and revenue functions under constant economies of scale: A simplification for the single output or input case," Working Papers 2011/12, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    10. Galina Besstremyannaya & Jaak Simm, 2015. "Robust non-parametric estimation of cost efficiency with an application to banking industry," Working Papers w0217, Center for Economic and Financial Research (CEFIR).
    11. Curi, Claudia & Gitto, Simone & Mancuso, Paolo, 2011. "New evidence on the efficiency of Italian airports: A bootstrapped DEA analysis," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 84-93, June.
    12. Fallah-Fini, Saeideh & Triantis, Konstantinos & de la Garza, Jesus M. & Seaver, William L., 2012. "Measuring the efficiency of highway maintenance contracting strategies: A bootstrapped non-parametric meta-frontier approach," European Journal of Operational Research, Elsevier, vol. 219(1), pages 134-145.

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