Productivity growth in European railways: a new approach

The paper develops a model to represent the cost structure of European railways based on a general index of technical change, which allows completely general estimation of productivity growth. The estimated model is based on a variable cost function for panel data, which allows for heterogeneity in spite of previous approaches in the railway economics and general index model literature which adopt the assumption of common technical parameters across countries.     

Non-parametric analyses of efficiency of airports

This paper estimates the efficiencies and productivity changes of 12 international airports in the Asia-Pacific region based on data from 1998 to 2006. We apply stochastic frontier analysis (SFA) to compute efficiency estimates and use the Malmquist productivity index (MPI) to analyze productivity changes. We use the SFA model with a translog-type production function after testing the statistical hypotheses. According to the results of the SFA hypothesis tests, airports have experienced a technological regression; the deviations from the efficiency frontier are caused more by technical inefficiency than random noise. However, the inefficiency was found to decrease. The MPI reveals a declining trend resulting more from technological change than from efficiency change, with a decrease in inefficiency. Taken together, both the hypothesis tests and the MPI not only provide consistent conclusions, but also suggest that airports should concentrate on technological progress.     

An empirical assessment of the CO2-sensitive productivity of European airlines from 2000 to 2010

Due to the ongoing increase in the number of commercial flights, greenhouse gas emissions from aviation are expected to rise significantly. Balancing the pursuit of productivity growth with environmental-footprint control policies comprises a long-term regulatory challenge. In this light, the main goals of the present paper are: (i) to measure the CO₂ emissions of European airlines from 2000 to 2010, (ii) to compute airlines’ productivity in developing an environmental-sensitive productivity index, (iii) to compare the obtained results with those resulting from a traditional index, and (iv) to identify the drivers affecting productivity changes. Our results show that on average, airlines’ relative CO₂ emissions have decreased. Although the airlines we studied experienced an average productivity increase—both considering and not considering negative externalities production—environmentally sensible productivity growth is lower than traditional productivity growth. Finally, we find that improvements in load factor as well as a combined increase in stage length and aircraft size affect productivity changes positively, while fuel efficiency is significant only in the case of a CO₂-sensitive measure of productivity.     

Regulation and efficiency: the case of European railways

During the long period of regulation of the railway system in Europe (1950s–1990s) the companies notably improved their levels of productivity. However, parallel to this, the state of their financial accounts also significantly worsened. In order to explain this fact we have estimated both cost and revenue frontier functions, calculating the losses associated with both cost and revenue inefficiencies as well as inefficiencies on the cost side. The results obtained show the existence of significant potential losses of revenue, which can be explained above all by the strong policy of regulation and intervention reigning in this period. A better commercial policy and a supply adapted to market conditions seem to be two unavoidable requisites for the future of European rail policy if the companies' financial burdens are to be reduced.     

Assessing the technical efficiency, service effectiveness, and technical effectiveness of the world’s railways through NDEA analysis

This paper presents an approach to include both the unstorable feature of transportation service and the technological differences within railway companies in efficiency and effectiveness measurements. We explore efficiency and effectiveness for a group of 40 global railways in the year 2002, using traditional data development analysis (TDEA) and network data development analysis (NDEA). Comparing the results obtained from the NDEA model with those from the TDEA indicate that performance measures are quite different in terms of the magnitude, and even using different DEA type models to evaluate railway system performance does not distort the ranking of their performance. We also analyze the inter-related effects among three performance measures, finding that transportation service characteristics have positive effects on the evaluation of performance. Generally speaking, the NDEA model provides deeper insight regarding the sources of inefficiency and process-specific guidance to railway managers so as to help them improve their railway’s performance.     

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.     

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.     

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.     

Energy efficiency,technological change and the dieselization of agriculture in the United States

This study focuses on the increase in the relative importance of diesel fuel consumption on farms in the United States over the 1971–1989 period. Four factors are identified as being central to the observed trend. These include the relative efficiency of diesel powered equipment versus gasoline powered equipment, technological changes that have impacted energy efficiency, the trend towards larger farms, and the enhanced energy conservation by farmers as a result of the adoption of reduced tillage practices.     

The operation of Swedish motor-vehicle inspections: efficiency and some problems concerning regulation

Efficiency in the operation of the Swedish motor-vehicle inspection monopoly was examined by analyzing data on all decision-making units related to production of inspection services during 1993. In addition, theoretically based arguments concerning some regulation problems are discussed. The results imply a fairly high level of technical efficiency, which might be explained by the extensive practice of yardstick-competition in the industry. The findings, based on a best-practice approach, do not indicate strong empirical evidence in support of a deregulation of the industry. However, the regulation problems discussed may provide motives for deregulation.     

Deconstructing delay: A non-parametric approach to analyzing delay changes in single server queuing systems

This paper introduces an empirically driven, non-parametric method to isolate and estimate the effects that changes in demand and changes in throughput have on delay – in particular, arrival and departure flight delay at airport runways. Classic queuing concepts were used to develop a method by which an intermediate, or counterfactual, queuing scenario could be constructed, to isolate the delay effects due to shifts in demand and throughput. This method includes the development of a stochastic throughput function that is based entirely on data and has three key features. Firstly, the function relies on non-parametric, empirically-based probability distributions of throughput counts. Secondly, facility capacity needs not be explicitly defined, as it is implicitly included in the probability distributions of throughput. Thirdly, the throughput performance function preserves the effect of factors that cause capacity (and, therefore, throughput) to fluctuate over a given period. Temporal sequences of high, moderate, and low capacity are maintained between the observed and counterfactual scenarios. The method was applied to a case study of the three major New York area airports of LaGuardia (LGA), Newark Liberty (EWR), and John F. Kennedy (JFK), using operational data extracted from the Federal Aviation Administration’s (FAA’s) Aviation System Performance Metrics (ASPM) database. The focus was on the peak summer travel seasons of 2006 and 2007, as these airports experienced record levels of delay in 2007. The results indicate that decreases in both demand and throughput were experienced at LGA and EWR, although the decreases in throughput had more significant effects on operational delays as they increased overall at these airports. At JFK, the increase in departure throughput was not sufficient to offset the increase in departure demands. For arrivals, demand increased and throughput decreased. These trends caused a significant growth in delay at JFK between 2006 and 2007.     

Urban single-lane roundabouts: A new analytical approach using multi-criteria and simultaneous multi-objective optimization of geometry design,efficiency and safety

Building safe and effective roundabouts requires optimizing traffic (operational) efficiency (TE) and traffic safety (TS) while taking into account geometric factors, traffic characteristics and local constraints. Most existing simulation-based optimization models do not simultaneously optimize all these factors. To capture the relationship among geometry, efficiency and safety, we put forward a model formulation in this paper. We present a new multi-criteria and simultaneous multi-objective optimization (MOO) model approach to optimize geometry, TE and TS of urban unsignalized single-lane roundabouts. To the best of our knowledge, this is the first model that uses the multi-criteria decision-making method known as analytic hierarchy process to evaluate and rank traffic parameters and geometric elements of urban single-lane roundabouts. The model was built based on comprehensive review of the research literature and existing roundabout simulation software, a field survey of 61 civil and traffic expert engineers in Croatia, and field studies of roundabouts in the Croatian capital city of Zagreb. We started from the basis of Kimber’s capacity model, HCM2010 serviceability model, and Maycock and Hall's accident prediction model, which we extended by adding sensitivity analysis and powerful MOO procedures of the bounded objective function method and interactive optimization. Preliminary validation of the model was achieved by identifying the optimal and most robust of three geometric alternatives (V.1-V.3) for an unsignalized single-lane roundabout in Zagreb, Croatia. The geometric parameters in variant V.1 had significantly higher values than in the existing design V.0, while approaches 1 and 3 in variant V.2 were enlarged as much as possible within allowed spatial limits and Croatian guidelines, reflecting their higher traffic demand. Sensitivity analysis indicated that variant V.2 showed the overall highest TE and TS across the entire range of traffic flow demand and pedestrian crossing flow demand at approaches. At the same time, the number of predicted traffic accidents was similar for all three variants, although it was lowest overall for V.2. The similarity in predicted accident frequency for the three variants suggests that V.2 provides the greatest safety within the predefined constraints and parameter ranges explored in our study. These preliminary results suggest that the proposed model can optimize geometry, TE and TS of urban single-lane roundabouts.     

Energy efficiency and time charter rates: Energy efficiency savings recovered by ship owners in the Panamax market

This paper presents the first analysis on how financial savings arising from energy efficient ships are allocated between owners and those hiring the ships. This as an important undertaking as allocation of financial savings is expected to have an impact on the incentives faced by ship owners to invest in more energy efficient vessels. We focus on the dry bulk Panamax segment as it contributes to around 50 Mt (5%) of total CO₂ emissions from shipping in 2007 and therefore its importance in terms of environmental impact should not be neglected. The time charter market represents a classical example of the principal–agent problem similar to the tenant–landlord problem in the buildings sector. We discovered that on average only 40% of the financial savings delivered by energy efficiency accrue to ship owner for the period 2008–2012. The finding that only part of the savings are recouped by shipowners affecting their incentives towards energy efficiency could consequently have implications on the type of emission reduction policies opted at both, global and regional levels.     

Measuring energy and environmental efficiency of transportation systems in China based on a parallel DEA approach

Because of China’s rapid economic development, its transportation system has become one of China’s high-energy-consumption and high-pollution-emission sectors. However, little research has been done which pays close attention to China’s transportation system, especially in terms of energy and environmental efficiency evaluation. In this paper, data envelopment analysis (DEA) is applied to measure the energy and environment performance of transportation systems in China with the goal of sustainable development. This paper treats transportation as a parallel system consisting of subsystems for passenger transportation and freight transportation, and extends a parallel DEA approach to evaluate the efficiency of each subsystem. An efficiency decomposition procedure is proposed to obtain the highest achievable subsystem efficiency. Our empirical study on 30 of mainland China’s provincial-level regions shows that most of them have a low efficiency in their transportation system and the two parallel subsystems. There are large efficiency differences between the passenger and freight transportation subsystems. In addition, unbalanced development has occurred in the three large areas of China, with the east having the highest efficiency, followed by central China and then west. Therefore, more measures should be taken to balance and coordinate the development between the three large areas and between the two subsystems within them. Our analysis approach gives data for determining effective measures.     

Organisation form,scale effects and efficiency in the British bus industry

The British bus industry is examined in light of fundamental reform in ownership and regulation. The industry is divided between privately and publicly owned companies, with the private sector further split between publicly listed owned subsidiaries and private limited companies. The change in ownership structure since privatization is analysed, and Data Envelopment Analysis used to estimate the extent of returns to scale and technical efficiency, as defined by one output and three inputs. Technical efficiency is further divided into managerial and organisational components, and comparisons made of median efficiency levels using a Mann Whitney statistical test.Increasing returns to scale are found for smaller companies, but the size of such returns varies with the company type. A minimum efficiency scale is identified, with constant returns above this point. A high degree of technical inefficiency is found to be present in the industry, which may initially suggest a lack of competition and reflect the oligopolistic structure that has emerged since privatisation. Privately owned companies are identified as more technically efficient, however this is due to significantly less organisational constraints, and considerable managerial inefficiency exists in this group. It is finally concluded that the high level of inefficiency may not reflect ownership, but rather industry characteristics, and rather than a lack of competition may be indicative of wasteful competition. It is suggested therefore there may be a need to make the market contestable rather than openly competitive.     

Climate change impacts on transport on the Rhine and Danube: A multimodal approach

This paper measures the potential effects of low water levels on the Rhine and Danube navigation in the context of weather variability and a number of climate change scenarios. A long-term multimodal network transport analysis over the period 2005–2050 is presented; it analyzes the impact of changes on the water depth conditions on transport costs and the modal splits between three competing modes. The results indicate that the impact of climate change until 2050 should be limited.     

A meta-analysis of DEA and SFA studies of the technical efficiency of seaports: A comparison of fixed and random-effects regression models

This paper presents a meta-analysis of variations in seaports’ Mean Technical Efficiency (MTE) scores based on 40 studies published in refereed academic journals. We link the variation in estimated MTE scores to differences in the following factors: the frontier methodology used, which essentially are the Data Envelopment Analysis (DEA) and the Stochastic Frontier Analysis (SFA); regions where seaports are situated; type of data used; number of observations; and the total number of variables used. Furthermore, we compare fixed-effects against a random-effects regression model where the latter assumes that the individual study specific characteristics matter while the former assumes that there is one general tendency across all studies. We present several findings based on the data: (1) the random-effects model outperforms the fixed effects model in explaining the variations in MTEs, (2) recently published studies have lower MTE scores as compared with earlier published studies, (3) studies that used nonparametric DEA models depict higher MTE scores as compared with those that used SFA models, (4) panel data studies have lower TE scores as compared with cross-sectional data, and (5) studies using European seaport data produce lower MTE scores when compared with the rest of the world. Finally, our results contradict some previous meta-analysis studies of TE scores. We encourage the use of random-effects models in meta-analysis studies because they account for individual study specific effects.     

Accounting for emissions in the measurement of transit agency efficiency: A directional distance function approach

This paper uses a directional distance function approach to demonstrate the importance of considering a transit agency’s goal of reducing vehicular emissions as well as production of passenger or vehicle-miles, when measuring agency efficiency. This is especially critical given the increased emphasis policymakers may place on efficiency in the allocation of scarce public resources. The analysis includes 43 single mode US bus transit agencies for the year 2000. Results show only five agencies performing efficiently when emission abatement is not included in the analysis, but 22 firms are identified as efficient once emission abatement is considered. Consistent with previous studies, public agencies are found to be less efficient than private agencies, regardless of the efficiency measure used.     

An application of the directional distance function with the number of accidents as an undesirable output to measure the technical efficiency of state road transport in India

By using the directional distance function (DDF) of data envelopment analysis (DEA), this study measures the technical efficiency of 37 Indian state road transport undertakings (SRTUs) for the year 2012–13. We employ the DDF as a tool for analyzing a joint production function with both desirable and undesirable outputs (i.e., the number of accidents). A comparison between the results with and without accidents shows that several SRTUs have experienced significant changes in their efficiency scores as well as in their rankings after accounting for the undesirable output. This indicates the importance of including the number of accidents – a safety standard – as representative of the undesirable output in computing the efficiency scores of SRTUs. The results of the Tobit model indicate that SRTUs with greater vehicle productivity are more efficient under both conventional DEA and DDF approaches. We also employed zero-truncated negative binomial model to assess the factors influencing the number of road accident experienced by the Indian SRTUs and found that the accident count was significantly influenced by fleet utilization and vehicle productivity.     

Principal components analysis and track quality index: A machine learning approach

Track geometry data exhibits classical big data attributes: value, volume, velocity, veracity and variety. Track Quality Indices-TQI are used to obtain average-based assessment of track segments and schedule track maintenance. TQI is expressed in terms of track parameters like gage, cross-level, etc. Though each of these parameters is objectively important but understanding what they collectively convey for a given track segment often becomes challenging. Several railways including passenger and freight have developed single indices that combines different track parameters to assess overall track quality. Some of these railways have selected certain parameters whilst dropping others. Using track geometry data from a sample mile track, we demonstrate how to combine track geometry parameters into a low dimensional form (TQI) that simplifies the track properties without losing much variability in the data. This led us to principal components. To validate the use of principal components as TQI, we employed a two-phase approach. First phase was to identify a classic machine learning technique that works well with track geometry data. The second step was to train the identified machine learning technique on the sample mile-track data using combined TQIs and principal components as defect predictors. The performance of the predictors were compared using true and false positive rates. The results show that three principal components were better at predicting defects and revealing salient characteristics in track geometry data than combined TQIs even though there were some correlations that are potentially useful for track maintenance.