Efficiency measurement in network industries
application to the Swiss railway companies
Additional information
Authors
Farsi M.,
Filippini M.,
Greene W.
Type
Journal Article
Year
2005
Language
English
Abstract
The persistence of increasingly high government subsidies in Switzerland’s railroads has led the federal and cantonal authorities to discussing the possibility of high-powered incentive contracts such as those based on cost efficiency benchmarking. Railways are however, characterized by a high degree of unobserved heterogeneity that could bias the efficiency estimates. This paper examines the performance of several panel data models to measure cost efficiency in network industries. The unobserved firm-specific effects and the resulting biases are studied through a comparative study of several stochastic frontier models, applied to a panel of 50 railway companies operating over a 13-year period.
Keywords
Incentive regulation, railroads, cost efficiency, scale economies
Journal
Journal of Regulatory Economics
Volume
28
Number ( Month )
1
Pages (or article number)
69-90
Diffusion
License
License undefined
Visibility
Public
Status open access
Green
