An Efficiency Analysis of European Countries' Railways

This study uses stochastic frontier analysis for estimating efficiencies of railways systems in European countries. We consider railways as a system which uses its infrastructure (length of lines worked, numbers of cars and wagons, staff strength) and a scale of market (number of habitants and tourists) for transporting passengers and freights. We estimate efficiencies of freight and passenger transportations separately on the base of different models. We use the database provided by International Union of Railways, which includes annual statistical data about biggest European railways companies from 1997 to 2006 to estimate model parameters. Railways systems show huge variations in technical efficiency between different countries and also between freight and passenger transportation within the same country. The study also contains the analysis of dependencies between calculated railways efficiency estimates and popular economic indicators.