The Relative Efficiency of Public and Private Bus Companies?
By applying Data Envelopment Analysis (DEA), this study examines the efficiency ofa subset of Norwegian bus companies in order to test the hypothesis that publiccompanies are less efficient than private ones. DEA consists of constructing apiecewise linear best practice frontier enveloping the input-output combinations of thecompanies, efficiency being measured for each individual company in terms of itsdistance relative to the frontier. DEA is widely acclaimed for being flexible, lettingthe data reveal the unknown and possibly complex relationships between inputs andoutputs. As a consequence, each company is most likely evaluated against similarcompanies being located in the ‘neighbourhood’ in the input-output space. If privateand public companies are clustered in separate subspaces in the input-output spacehowever, each company will most likely be evaluated against companies of its ownrather than the opposite category of ownership. In order to avoid this pitfall, weidentify and include in the study only those companies that are found to be eitherefficient or inefficient as compared to at least one company in the opposite categoryof ownership. The results from the study are compared to those obtained by the moreconventional approach where all companies are included in the study.
Year of publication: |
2001
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Authors: | Odeck, James ; Sunde, Øyvind |
Publisher: |
Institute of Transport and Logistics Studies. Faculty of Economics and Business. The University of Sydney |
Saved in:
freely available
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