The influence of the road network on private productivity measures using Data Envelopment Analysis: A case study from Spain

We evaluate the economic effects of investment in the road network on private regional activity. We employ provincial Spanish panel data from 1980 to 2007 to perform non-parametric frontier techniques based on Data Envelopment Analysis and to obtain the Malmquist productivity indexes, thus enabling us to examine the evaluation of the productivity growth via technological changes or efficiency gains. Additionally, we analyze the role of transport infrastructure on the evolution of Total Factor Productivity and its components through econometric techniques. Our results show important spillover effects. Moreover, our findings have significant implications for policy makers if we take into account the fact that the use of the road network in economic activity or in commercial relations greatly influences productivity growth.     

The Measurement of Efficiency of UK Airports,Using a Stochastic Latent Class Frontier Model

Abstract

In this paper, the latent stochastic frontier model is used to estimate the technical efficiency of UK airports. These airports are ranked according to their technical efficiency for the period 2000–06 and the airports are disentangled and segmented by the cost frontier model, which leads us to advise the implementation of policies by segments. Economic implications arising from the study are also considered.     

Effects of corruption on efficiency of the European airports

The effect of corruption on airport productive efficiency is analyzed using an unbalanced panel data of major European airports from 2003 to 2009. We first compute the residual (or net) variable factor productivity using the multilateral index number method and then apply robust cluster random effects model in order to evaluate the importance of corruption. We find strong evidence that corruption has negative impacts on airport operating efficiency; and the effects depend on the ownership form of the airport. The results suggest that airports under mixed public–private ownership with private majority achieve lower levels of efficiency when located in more corrupt countries. They even operate less efficiently than fully and/or majority government owned airports in high corruption environment. We control for economic regulation, competition level and other airports’ characteristics. Our empirical results survive several robustness checks including different control variables, three alternative corruption measures: International Country Risk Guide (ICRG) corruption index, Corruption Perception Index (CPI) and Control of Corruption Index (CCI). The empirical findings have important policy implications for management and ownership structuring of airports operating in countries that suffer from higher levels of corruption.     

Evaluation of Potentially Successful Barge Innovations

Abstract

The main objective of this article is to analyse the changes in productivity of the Taiwan Bus Transit System (TBTS) before and after the execution of the ‘Alternatives for Promoting the Development of the Public Transportation Sectors’ (APDPTS), which is designed to provide a better operating environment for the public transport sector in the provision of public transit services. We use a decomposition of the Malmquist productivity index to locate the sources of productivity growth, namely technical change and efficiency change. The former is further decomposed into an output bias, an input bias and a magnitude term to test neutrality. The latter is also decomposed into changes in pure technical efficiency and scale efficiency. In our case, between the pre‐ and post‐APDPTS periods, the efficiency increased only marginally. As a result of a five‐year enhancement programme, the technical regress slowed down slightly, and inward neutral shifts of a transformation frontier were interpreted as being the main contributor to technical regress. In particular, evidence of biased technical change was found, i.e., the effects of output capability increased slightly, but the efficient use of inputs declined during the post‐APDPTS period.     

Technical change and productivity growth in airports: A case study

This paper analyses the rate of technical progress at Portuguese airports between 1990 and 2000, using a stochastic cost frontier method. A translog frontier model is used and the maximum likelihood estimation technique is employed to estimate the empirical model. We estimate the efficient scores and disentangle the rate of technical progress into three components: pure technical progress, non-neutral technical progress and scale-augmenting technical progress. The results show that the average score is 88%, denoting a relatively high degree of waste, despite the fact that technical change contributed to a reduction in costs.     

The influence of the operational environment on efficiency of international airports

Heterogeneity must be considered in the efficiency analysis of decision‐making units; otherwise, the results will be strongly biased. This is also valid for airport management where the operational environment heavily influences efficiency. In this paper, conditional efficiency measures are applied to airports to incorporate heterogeneity in non‐parametric frontier models which are robust for outlying observations. In particular, the influence of the operational environment on airport efficiency is examined in a sample of 141 international airports. The conclusions show that the operational environment indeed matters and that privatisation, regulation, traffic transfer and the dominant carrier have a positive effect on efficiency, whereas aeronautical revenues influence it negatively. Copyright © 2014 John Wiley & Sons, Ltd.     

Productivity,efficiency and technical change in the European railways: A non-parametric approach

The purpose of this paper is to analyse the evolution of productivity in the European railways in the period 1970–95. We use a non-parametric approach that enables changes in productivity to be broken down into variations in efficiency and technical change. The results indicate that the productivity growth is concentrated in the last period (1985–95), when the majority of the companies undertook processes of reforms. This increase in productivity is mainly due to technical progress. We also analyse the determinants of efficiency and, unlike other papers, the technical change, finding that the greater the degree of autonomy and financial independence, the higher the efficiency levels and technical change. This revised version was published online in June 2006 with corrections to the Cover Date.     

Estimating the inefficiency in the Norwegian bus industry from stochastic cost frontier models

A stochastic cost frontier function based on data from 170 of the 175 Norwegian subsidized bus companies is estimated under two alternative presumptions regarding the distribution of the inefficency among the bus operators. When the inefficiency is assumed to be half-normally distributed, the average inefficiency in the industry is estimated to be 13.7 per cent. This calculated value is nearly halved (7.2 per cent) when the exponential distribution is applied, while the ranking of the companies according to inefficiency is unchanged. By regressing the estimated inefficiency values for each company on some exogenous variables describing its ownership structure and the subsidy policy which it faces, it is seen that inefficiency of the companies which negotiate with the public authorities over the subsidy amounts is slightly higher than the inefficiency of the companies which face a subsidy policy based on cost norms. Our analysis gives, however, no significant differences in the efficiency between privately owned bus companies and publicly owned bus operators, and shows only minor economies of scale.     

When it comes to container port efficiency,are all developing regions equal?

In this paper we carry out a container port performance analysis of the developing world between 2000 and 2010, using both parametric and nonparametric approaches. From a unique dataset – our sample covers 70 developing countries, 203 ports, and 1750 data points–, we examine the evolution and drivers of productivity and efficiency changes across developing regions. We show that productivity growth rates between 2000 and 2010 vary significantly and that this heterogeneity is explained by pure efficiency changes rather than scale efficiency of technological changes. Therefore, we carry out a detailed efficiency analysis to determine the drivers of port efficiency. Time series results show an upward trend for port efficiency in developing regions, as it increased from 51 percent in 2000 to 61 percent in 2010. Our analysis indicates that private sector participation, the reduction of corruption in the public sector, improvements in liner connectivity and the existence of multimodal links increase the level of port efficiency in developing regions.     

Contract Design,Financing Arrangements and Public Ownership—An Assessment of the US Airport Governance Model

Abstract

US airports negotiate legally binding contracts with airlines and finance large investment projects with revenue bonds. Applying insights from transaction cost economics, we argue that the observed variation in contractual and financing arrangements at US airports corresponds to the parties' needs for safeguarding and coordination. The case evidence presented reveals that public owners set the framework for private investments and contracting. We suggest that airline contracts and capital market control result in comparative efficient investments and act as a check on the cost inefficiency typically linked to public ownership.     

Managerial efficiency of Brazilian airports

The efficiency of 35 Brazilian domestic airports was discussed with a view to identifying avenues to improvement in two dimensions. The first of these is improved management, which shows in the airport’s ability to generate financial returns. The second is the physical dimension, which shows the level of utilization of airport infrastructure. The data envelopment analysis methodology was used to measure distance from the airport efficient frontier and to enable avenues to managerial improvement to be identified.     

Changes in multi-mode bus transit efficiency, 1988–1992

This paper examines the claim that US bus transit productivity has declined in recent years. It does so with reference to a piecewise-linear best-practice (DEA) production frontier, computed for multi-modal bus transit between 1988 and 1992. Efficiency is measured both by a Russell (static) and Malmquist (dynamic) measure of productivity change. The principal finding is that, overall, bus transit efficiency has improved slightly over the period.     

Port privatization,efficiency and competitiveness: Some empirical evidence from container ports (terminals)

Few studies have investigated the quantitative relationship between port ownership structure and port efficiency with mixed results. This study applies a stochastic frontier model proposed by Battese and Coelli [Battese, G.E., Coelli, T.J., 1995. A model for technique inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics 20, 325–332], which incorporates the inefficiency effect, to show whether port privatization is a necessary strategy for ports to gain a competitive advantage. While this stochastic frontier model has been used to a wide number of industries where the technical inefficiency effect is required, this method has rarely been employed to port industry. This study also investigates the determinants of port competitiveness. Both the principal component analysis (PCA) and the linear regression model are used to examine the effects of identified key factors on port competitiveness. Based on a sample of selected container terminals around the world, the results of this study have shown that private sector participation in the port industry to some extent can improve port operation efficiency, which will in turn increase port competitiveness. Another important determinant of port competitiveness is the adaptability to the customers’ demand. All these results provide some policy implications and guidance for port authorities and port operators in formulating effective strategies to improve their competitiveness vis-à-vis rivals.     

Performance assessment of transport services with the ERM-NDEA model: evidence from a domestic airline in Taiwan

Abstract

This paper estimates comprehensive operational performance measures for transport services. A network efficiency approach is used to analyze the production efficiency, service efficiency, and operational efficiency in a unified framework to reflect the transportation service characteristics of airline operations. We show how a modified version of the network data envelopment analysis model can be utilized for evaluating the performance of air route operations. This study considers 15 air routes operated by a domestic airline in Taiwan to highlight the value of the approach. The results of the analysis show the inputs and consumed outputs leading to production inefficiency and service inefficiency respectively as well as the magnitudes of excesses and shortfalls.     

The technical efficiency of container ports: Comparing data envelopment analysis and stochastic frontier analysis

The efficiency of the container port industry has been variously studied utilising either Data Envelopment Analysis (DEA) or Stochastic Frontier Analysis (SFA). Given the strengths and weaknesses associated with these two approaches, the efficiency estimates and scale properties derived from these analyses are not always convincing. This paper applies both approaches to the same set of container port data for the world’s largest container ports and compares the results obtained. A high degree of correlation is found between the efficiency estimates derived from all the models applied, suggesting that results are relatively robust to the DEA models applied or the distributional assumptions under SFA. High levels of technical efficiency are associated with scale, greater private-sector participation and with transhipment as opposed to gateway ports. In analysing the implications of the results for management and policy makers, a number of shortcomings of applying a cross-sectional approach to an industry characterised by significant, lumpy and risky investments are identified and the potential benefits of a dynamic analysis, based on panel data, are enumerated.     

Including local air pollution in airport efficiency assessment: A hyperbolic-stochastic approach

We examine data from Italian airports covering 2005–2008 to include local environmental effects in airport efficiency assessment. We consider both desirable outputs such as aircraft, passengers, and freight movements and some undesirable outputs of airport operations associated with local air pollution. We estimate both a classical distance function with no undesirable output, and a hyperbolic distance function. By comparing the estimated efficiency scores with these two frontiers we show that airport efficiency increases when local air pollution is included in the analysis. Moreover, we show a fleet-mix effect because airports with similar aircraft movements exhibit large variations in the amount of pollution per flight. Last, we find that there is complementarity between desirable and undesirable output: a 1% decrease in pollution has an opportunity cost of a 0.67% reduction in both passenger and freight traffic.     

Costs and benefits of US aviation noise land-use policies

Aircraft noise affects human health and welfare. One method US airports use to mitigate the impact of noise on nearby residents is through sound insulation and residential land acquisition projects. Costs of residential insulation and acquisition projects are taken from federal grant summaries while the benefits of noise reduction are calculated as the combined willingness-to-pay for abatement and direct and indirect costs of illness from hypertension, myocardial infarction, and stroke. We show that the average cost of sound insulation projects is $15,600 per person affected while that of land acquisition is $48,900 per person affected. We find that for only in 15% of projects do the benefits to residents from willingness-to-pay for reduction and reduced risk of mortality and morbidity exceed the costs of sound insulation for residences exposed to 65 dB Day Night Level (DNL) of noise. Our estimates suggest that noise insulation projects are more cost-effective than fleet wide mandatory aircraft retirement.     

Technological innovations in the transport sector: the need for cooperation to meet environmental interests

Environmental problems have become urgent in many countries. A large contribution to the solution of environmental problems is expected from technological change. This raises the issue of how technological change takes place, and more in particular how technological change can be promoted that is beneficial to long term sustainability objectives.

In the paper we discuss this topic in the context of the transport sector. This is relevant because transportation contributes significantly to various types of pollution, existing trends might lead to even more negative impacts and finally there are high expectations about the potential of future technological development to reduce the environmental impact of transportation.

We approach the issue of technological change towards more environmentally sound development from the perspective of technology dynamics and sustainable development. We argue that additional theoretical insights are needed especially when one wants to study technological change in the context of environmental problems. We therefore discuss a strategy of cooperation between government and firms in network. Special attention is paid to the role of the government in networks and the use of a new type of instruments.     

Comparing the impact of future airline network change on emissions in India and the United States

In this paper we use simulation to analyze how flight routing network structure may change in different world regions, and how this might impact future traffic growth and emissions. We compare models of the domestic Indian and US air transportation systems, representing developing and mature air transportation systems respectively. We explicitly model passenger and airline decision-making, capturing passenger demand effects and airline operational responses, including airline network change. The models are applied to simulate air transportation system growth for networks of 49 airports in each country from 2005 to 2050. In India, the percentage of connecting passengers simulated decreases significantly (from over 40% in 2005 to under 10% in 2050), indicating that a shift in network structure towards increased point-to-point routing can be expected. In contrast, very little network change is simulated for the US airport set modeled. The simulated impact of network change on system CO₂ emissions is very small, although in the case of India it could enable a large increase in demand, and therefore a significant reduction in emissions per passenger (by nearly 25%). NO_x emissions at major hub airports are also estimated, and could initially reduce relative to a case in which network change is not simulated (by nearly 25% in the case of Mumbai in 2025). This effect, however, is significantly reduced by 2050 because of frequency competition effects. We conclude that network effects are important when estimating CO₂ emissions per passenger and local air quality effects at hub airports in developing air transportation systems.     

Joint impact of competition,ownership form and economic regulation on airport performance and pricing

The combined impact of ownership form, economic regulation and competition on airport performance is analyzed using data envelopment analysis to measure cost efficiency in the first stage and regression analysis to measure the impact of the environment in the second stage. The empirical results of an analysis of European and Australian airports over a 10 year timeframe reveal that under relatively non-competitive conditions, public airports operate less cost efficiently than fully private airports. Irrespective of ownership form, regulation is necessary to emulate competitive forces thus pushing airport management towards cost efficiency and reasonable pricing policies. Under potential regional or hub competition, economic regulation inhibits airports of any ownership form from operating and pricing efficiently. Although public and fully private airports operate equally efficiently in a competitive setting, private airports still set higher aeronautical charges. Furthermore, mixed ownership forms with a majority public holding are neither cost efficient nor low price, irrespective of the level of competition.