How Efficient Are Ferries In Providing Public Transport Services? The Case Of Norway

In this paper we provide a yardstick for measuring the performance of ferries involved in theNorwegian trunk road system. We establish a best practice frontier from which individualferries are measured against. The potentials for efficiency improvements can then be derivedgiving the decision makers knowledge of the magnitude of efficiency gains that can beachieved if the current subsidy regime is changed. The approach we use for establishing thefrontier is the Data Envelopment Analysis (DEA) which is known to tackle problems of thistype appropriately and which is now popular in assessing the efficiency of public transportservices. Further, we use rich data comprising about 82 ferries operating throughout thecountry. The data are from the account years 2003 – 2005 and includes as inputs; fuel,labour, capital and maintenance costs, and as output ferry kilometres per year.Our results indicate that there is a large potential for efficiency improvements in the sector aswhole. Further, we find that area of operation e.g. whether open sea or not has a significantimpact on efficiency thus we warn the decision makers not to be indifferent concerning thearea where services are provided when assessing performances of the ferry sector. Ourfindings if used appropriately could improve the ferry subsidy schemes which today are basedon standard cost norms and that do not address special cost drivers such as area of operationand capacity of ferries.