This paper makes two important contributions to the literature on prediction intervals for firm specific inefficiency estimates in cross sectional SFA models. Firstly, the existing intervals in the literature do not correspond to the minimum width intervals and in this paper we discuss how to...

This paper highlights the importance of modelling the interaction between returns to scale/density and heterogeneity of services when evaluating optimal size and structure of passenger rail operations. We propose and estimate a hedonic cost function which allows us to incorporate measures of...

In this paper we consider the sensitivity of functional form in the popular panel data stochastic frontier model proposed by Battese and Battese and Coelli (BC, 1992). We demonstrate that adopting the (t−T) efficiency functional form used by BC can, in a model which allows for firm specific...

Economic theory advocates marginal cost pricing for efficient utilisation of transport infrastructure. A growing body of literature has emerged on the issue of rail marginal infrastructure wear and tear costs, but the majority of the work is focused on costs for infrastructure maintenance....

This paper applies econometric methods to estimate marginal track maintenance cost in Britain - for the first time. The British case is the most radical example of rail reform in the world, and the 2005 Railway Act has resulted in a new and unique regulatory process for determining funding and...

International cost efficiency benchmarking played a central role in informing the Office of Rail Regulation's (ORR) determination of Network Rail's future funding during the 2008 periodic review (PR08) of the company's finances. This paper sets out how international benchmarking can inform a...

The application of nonlinear fixed effects models in econometrics has often been avoided for two reasons, one methodological, one practical. The methodological question centers on a incidental parametres problem that raises questions about the statistical properties of the estimator. The...

This paper surveys recently developed approaches to analyzing panel data with nonlinear models. We summarize a number of results on estimation of fixed and random effects models in nonlinear modeling frameworks such as discrete choice, count data, duration, censored data, sample selection,...