Efficiency of Urban Bus Companies in India: A Stochastic Frontier Analysis ()
ABSTRACT
The main aim of this paper is
to measure the technical efficiency of publicly owned
urban bus companies (UBCs) in India for the period 2000-01 to 2012-13. To examine the efficiency as well as determinants of
the same, we estimated a stochastic production frontier based on a
translog production function using the maximum
likelihood methods. The empirical results reveal that profit and fleet utilization have a significant influence on
technical efficiency of UBCs. We find that
substantial inefficiencies, averaging between 12 to 41 percent, exist; in general, small and large size UBCs are more
efficient than their medium size counterparts.
Therefore, there exists no linear relationship between technical efficiency and firm size. We also examined
the temporal relationship of the cross-sectional rankings of individual UBCs’ technical efficiency estimates. To address
this issue, we calculated Kendall’s index of rank concordance and
coefficient of variation of technical efficiency for sample period. It is found
that, by and large, there has been stability in ranks across UBCs in regard to
their technical efficiency.
Share and Cite:
Singh, S. (2017) Efficiency of Urban Bus Companies in India: A Stochastic Frontier Analysis.
Theoretical Economics Letters,
7, 1925-1939. doi:
10.4236/tel.2017.77130.
Cited by
No relevant information.