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Unobserved Heterogeneity and International Benchmarking in Public Transport

  • Astrid Cullman

    ()

    (German Institute for Economic Research DIW Berlin, Department of Innovation, Manufacturing, Service, Berlin, Germany)

  • Mehdi Farsi

    ()

    (Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerland)

  • Massimo Filippini

    ()

    (Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerland)

We analyze the technical efficiency of German and Swiss urban public transport companies by means of SFA. In transport networks we might face different network structures or complexities, not observed, but influencing the production process. The unobserved factors are typically modeled as separable factors. However, we argue that the entire production process is organized around different network structures. Therefore, they are inevitably non-separable from the observed inputs and outputs. The adopted econometric model is a random coefficient stochastic frontier model. We estimate an input distance function for the years 1991 to 2006. The results underline the presence of unobserved non-separable factors.

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Paper provided by CEPE Center for Energy Policy and Economics, ETH Zurich in its series CEPE Working paper series with number 09-65.

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Length: 34 pages
Date of creation: Aug 2009
Date of revision:
Handle: RePEc:cee:wpcepe:09-65
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