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.