Cost Efficiency and Subsidization in German Local Public Bus Transit
This paper examines the impact of endogenous deficit-balancing subsidies on the cost efficiency of local public bus companies by using alternative frontier cost models for panel data. Thereby, the multidimensional performance estimation incorporates the subsidy variable directly. The empirical analysis relies on a unique dataset of 33 German companies observed over a period of up to twelve years. We find a positive effect of endogenous subsidies on the standard deviation of cost inefficiency implying that the range of companies’ cost inefficiency increases with the level of subsidies relative to total costs. Further, we find that non-subsidized firms perform better.
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.
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.
|Date of creation:||Feb 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
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.:
- Massimo Filippini & Paola Prioni, 2003. "The influence of ownership on the cost of bus service provision in Switzerland - an empirical illustration," Applied Economics, Taylor & Francis Journals, vol. 35(6), pages 683-690.
- KERSTENS, Kristiaan, 1995.
"Technical efficiency measurement and explanation of French urban transit companies,"
SESO Working Papers
1995020, University of Antwerp, Faculty of Applied Economics.
- 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.
- Mehdi Farsi & Massimo Filippini & Michael Kuenzle, 2005. "Unobserved heterogeneity in stochastic cost frontier models: an application to Swiss nursing homes," Applied Economics, Taylor & Francis Journals, vol. 37(18), pages 2127-2141.
- Mehdi Farsi & Massimo Filippini & Michael Kuenzle, 2004.
"Cost Efficiency in Regional Bus Companies: An Application of Alternative Stochastic Frontier Models,"
CEPE Working paper series
04-33, CEPE Center for Energy Policy and Economics, ETH Zurich.
- Mehdi Farsi & Massimo Filippini & Michael Kuenzle, 2006. "Cost Efficiency in Regional Bus Companies: An Application of Alternative Stochastic Frontier Models," Journal of Transport Economics and Policy, University of Bath, vol. 40(1), pages 95-118, January.
- Sakano, Ryoichi & Obeng, Kofi, 2011. "Examining the Inefficiency of Transit Systems Using Latent Class Stochastic Frontier Models," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 50(2).
- K. Obeng, 2011.
"Indirect production function and the output effect of public transit subsidies,"
Springer, vol. 38(2), pages 191-214, March.
- Obeng, K., 2009. "Indirect production function and the output effect of Public transit subsidies," 50th Annual Transportation Research Forum, Portland, Oregon, March 16-18, 2009 207603, Transportation Research Forum.
- 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.
- Kim, Moshe & Spiegel, Menahem, 1987. "The effects of lump-sum subsidies on the structure of production and productivity in regulated industries," Journal of Public Economics, Elsevier, vol. 34(1), pages 105-119, October.
- 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.
- B. De Borger & K. Kerstens, 2006.
"The performance of bus-transit operators,"
- Schmidt, Peter & Lovell, C. A. Knox, 1980. "Estimating stochastic production and cost frontiers when technical and allocative inefficiency are correlated," Journal of Econometrics, Elsevier, vol. 13(1), pages 83-100, May.
- Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-74, October.
- James Odeck & Abdulrahim Alkadi, 2004. "The performance of subsidized urban and rural public bus operators: Empirical evidence from Norway," The Annals of Regional Science, Springer, vol. 38(3), pages 413-431, 09.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
- 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.
- Adler, Nicole & Yazhemsky, Ekaterina, 2010. "Improving discrimination in data envelopment analysis: PCA-DEA or variable reduction," European Journal of Operational Research, Elsevier, vol. 202(1), pages 273-284, April.
- Ryoichi Sakano & Kofi Obeng & G. Azam, 1997. "Subsidies And Inefficiency: Stochastic Frontier Approach," Contemporary Economic Policy, Western Economic Association International, vol. 15(3), pages 113-127, 07.
- van Goeverden, Cees & Rietveld, Piet & Koelemeijer, Jorine & Peeters, Paul, 2006. "Subsidies in public transport," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 32, pages 5-25.
- Mehdi Farsi & Massimo Filippini, 2008.
"An Analysis of Cost-Efficiency in Swiss Multi-utilities,"
CEPE Working paper series
08-60, CEPE Center for Energy Policy and Economics, ETH Zurich.
- Farsi, Mehdi & Filippini, Massimo, 2009. "An analysis of cost efficiency in Swiss multi-utilities," Energy Economics, Elsevier, vol. 31(2), pages 306-315, March.
- K. Obeng & R. Sakano, 2000. "The Effects of Operating and Capital Subsidies on Total Factor Productivity: A Decomposition Approach," Southern Economic Journal, Southern Economic Association, vol. 67(2), pages 381-397, July.
- Miller, David R, 1970. "Differences among Cities, Differences among Firms, and Costs of Urban Bus Transport," Journal of Industrial Economics, Wiley Blackwell, vol. 19(1), pages 22-32, November.
- Carlo Cambini & Massimiliano Piacenza & Davide Vannoni, 2007. "Restructuring Public Transit Systems: Evidence on Cost Properties from Medium and Large-Sized Companies," Review of Industrial Organization, Springer, vol. 31(3), pages 183-203, November.
- Fox, Kevin J., 1999. "Efficiency at different levels of aggregation: public vs. private sector firms," Economics Letters, Elsevier, vol. 65(2), pages 173-176, November.
- Maria Nieswand & Astrid Cullmann & Anne Neumann, 2009.
"Overcoming Data Limitations in Nonparametric Benchmarking: Applying PCA-DEA to Natural Gas Transmission,"
Discussion Papers of DIW Berlin
962, DIW Berlin, German Institute for Economic Research.
- Nieswand Maria & Cullmann Astrid & Neumann Anne, 2010. "Overcoming Data Limitations in Nonparametric Benchmarking: Applying PCA-DEA to Natural Gas Transmission," Review of Network Economics, De Gruyter, vol. 9(2), pages 1-22, June.
- Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
- Sakai, Hiroki & Shoji, Kenichi, 2010. "The effect of governmental subsidies and the contractual model on the publicly-owned bus sector in Japan," Research in Transportation Economics, Elsevier, vol. 29(1), pages 60-71.
- Astrid Cullmann, 2012. "Benchmarking and firm heterogeneity: a latent class analysis for German electricity distribution companies," Empirical Economics, Springer, vol. 42(1), pages 147-169, February.
- 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.
- Luis Orea & Subal C. Kumbhakar, 2004. "Efficiency measurement using a latent class stochastic frontier model," Empirical Economics, Springer, vol. 29(1), pages 169-183, January.
- Caudill, Steven B & Ford, Jon M & Gropper, Daniel M, 1995. "Frontier Estimation and Firm-Specific Inefficiency Measures in the Presence of Heteroscedasticity," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(1), pages 105-11, January.
- Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
- Schmidt, Peter & Knox Lovell, C. A., 1979. "Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers," Journal of Econometrics, Elsevier, vol. 9(3), pages 343-366, February.
- Hadri, Kaddour, 1999. "Estimation of a Doubly Heteroscedastic Stochastic Frontier Cost Function," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(3), pages 359-63, July.
- Viton, Philip A, 1981. "A Translog Cost Function for Urban Bus Transit," Journal of Industrial Economics, Wiley Blackwell, vol. 29(3), pages 287-304, March.
- Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
- Kaddour Hadri & Cherif Guermat & Julie Whittaker, 2003. "Estimating Farm Efficiency in the Presence of Double Heteroscedasticity Using Panel Data," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 255-268, November.
- Subal Kumbhakar, 1997. "Efficiency estimation with heteroscedasticity in a panel data model," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 379-386.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:9346. 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: ()The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct email address
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.