IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Regulatory Constraints and Cost Efficiency of the Italian Public Transit Systems: An Exploratory Stochastic Frontier Model

The core of the present study is to analyse the cost efficiency of public transit systems in Italy, investigating the way subsidization mechanisms and network characteristics affect the x-inefficiency levels of firms. The analysis uses a seven-year (1993-1999) unbalanced panel of 45 Italian public-owned companies run under two different regulatory schemes (cost-plus or fixed-price). A stochastic cost frontier is estimated by applying the Battese and Coelli (1995) econometric model, which allows the inefficiency measures to depend on observable factors that are firm-specific and can vary over time. The results provide some insights regarding the appropriate mechanism of granting subsidies, and in turn they are useful for assessing the ongoing reform of the sector. The evidence indicates that there is scope for transport policy to increase cost efficiency. Efforts have to be intensified in the twofold direction of replacing cost-plus subsidization mechanisms with high-powered incentive schemes and improving exogenous operating conditions of the network. The latter goal could be pursued by acting on factors such as the road space allocation (exclusive lanes for trams and buses, parking and private traffic regulation), or the provision of incentives for the use of public modes.

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://www.ceris.cnr.it/ceris/workingpaper/2002/wp02_02_Piacenza.pdf
Download Restriction: no

Paper provided by Institute for Economic Research on Firms and Growth - Moncalieri (TO) in its series CERIS Working Paper with number 200202.

as
in new window

Length: 52 pages
Date of creation: Jun 2002
Date of revision:
Handle: RePEc:csc:cerisp:200202
Contact details of provider: Postal: Via Real Collegio, 30 10024 - Moncalieri TO
Phone: +39-11.6824.911
Fax: +39-11.6824.966
Web page: http://www.ceris.cnr.it/
Email:


More information through EDIRC

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. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  2. Philippe Gagnepain & Marc Ivaldi, 2002. "Stochastic Frontiers and Asymmetric Information Models," Post-Print hal-00622849, HAL.
  3. Massimiliano Piacenza, 2000. "The Public Transit Systems In Italy: A Critical Analysis Of The Regulatory Framework," CERIS Working Paper 200016, Institute for Economic Research on Firms and Growth - Moncalieri (TO).
  4. Ferrier, Gary D. & Lovell, C. A. Knox, 1990. "Measuring cost efficiency in banking : Econometric and linear programming evidence," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 229-245.
  5. 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.
  6. 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.
  7. K. Kalirajan, 1981. "An Econometric Analysis of Yield Variability in Paddy Production," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 29(3), pages 283-294, November.
  8. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1989. "Production Frontiers With Cross-Sectinal And Time-Series Variation In Efficiency Levels," Working Papers 89-18, C.V. Starr Center for Applied Economics, New York University.
  9. 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.
  10. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
  11. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
  12. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
  13. Dag Morten Dalen & Andres Gomez Lobo, 1996. "Regulation and incentive contracts: An empirical investigation of the Norwegian bus transport industry," IFS Working Papers W96/08, Institute for Fiscal Studies.
  14. Philippe Gagnepain, 1998. "Structures productives de l'industrie du transport urbain et effets des schémas réglementaires," Économie et Prévision, Programme National Persée, vol. 135(4), pages 95-107.
  15. Mensah, Yaw M., 1994. "A simplification of the Kopp--Diewert method of decomposing cost efficiency and some implications," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 133-144.
  16. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181, March.
  17. Stevenson, Rodney E., 1980. "Likelihood functions for generalized stochastic frontier estimation," Journal of Econometrics, Elsevier, vol. 13(1), pages 57-66, May.
  18. Boitani Andrea & Cambini Carlo, 2002. "Regolazione incentivante per i servizi di trasporto locale," Politica economica - Journal of Economic Policy (PEJEP), Società editrice il Mulino, issue 2, pages 193-226.
  19. Greene, William H., 1980. "On the estimation of a flexible frontier production model," Journal of Econometrics, Elsevier, vol. 13(1), pages 101-115, May.
  20. Greene, William H., 1990. "A Gamma-distributed stochastic frontier model," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 141-163.
  21. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
  22. Caves, Douglas W & Christensen, Laurits R & Swanson, Joseph A, 1981. "Productivity Growth, Scale Economies, and Capacity Utilization in U.S. Railroads, 1955-74," American Economic Review, American Economic Association, vol. 71(5), pages 994-1002, December.
  23. D. Fabbri, 1996. "La Stima di Frontiere di Costo nel Trasporto Pubblico Locale: una Rassegna e un'Applicazione," Working Papers 270, Dipartimento Scienze Economiche, Universita' di Bologna.
  24. Greene, William H., 1980. "Maximum likelihood estimation of econometric frontier functions," Journal of Econometrics, Elsevier, vol. 13(1), pages 27-56, May.
  25. Boitani Andrea, 2000. "Un'Autorità di regolazione dei trasporti?," L'industria, Società editrice il Mulino, issue 4, pages 821-832.
  26. Giovanni Fraquelli & Massimiliano Piacenza & Graziano Abrate, 2001. "Costs and Technology of Public Transit Systems in Italy:Some Insights to Face Inefficiency," CERIS Working Paper 200112, Institute for Economic Research on Firms and Growth - Moncalieri (TO).
  27. Massimiliano Piacenza & Giovanni Fraquelli & Graziano Abrate, 2001. "Il trasporto pubblico locale in Italia: variabili esplicative dei divari di costo tra le imprese," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2001(111).
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:csc:cerisp:200202. 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: (Enrico Viarisio)

or (Anna Perin)

or (Giancarlo Birello)

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.