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Unobserved Heterogeneity and Efficiency Measurement in Public Transport

Referierte Aufsätze Web of Science

Astrid Cullmann, Mehdi Farsi, Massimo Filippini

In: Journal of Transport Economics and Policy 46 (2012), 1, S. 51-66


Efficiency measurement in public transport requires an adequate account of unobserved network characteristics that are typically modelled as factors separable from the production process. This paper proposes a panel data model that allows for non-separable firm-specific heterogeneity in an input distance function. The proposed model is applied to a sample of German and Swiss urban transit companies operating from 1991 to 2006. The results underline the presence of non-separable unobserved factors and their effects on technological characteristics such as returns to scale. Moreover, the data suggest that the effect of time-invariant heterogeneity could be significantly greater than technical inefficiency.

Astrid Cullmann

Research Associate in the Energy, Transportation, Environment Department