Abstract This paper studies the effects of regulations, input subsidies, their interactions and technical efficiency on cost efficiency and shows how a firm's cost efficiency relates to society's cost efficiency. It finds that from societal viewpoint, the average US public transit system is 45% cost efficient, a product of 84.4% technical efficiency and 53.5% allocative efficiency. From a transit system's viewpoint, it is 78.6%, 59.5% and 84.4% cost efficient when it internalizes input subsidies, regulations and both respectively. Additionally, it finds that the incentive tier regulation reduces capital-labor allocative distortion, the federal labor protection regulation increases nonlabor-labor allocative distortion and cost inefficiency, the incentive regulation increases cost efficiency, and the bus useful-life regulation increases cost inefficiency through increasing technical inefficiency. Together, in the sample of transit systems studied the regulations studied counteract the capital-labor allocative distortion from the subsidies and reinforce the nonlabor-labor allocative distortion from subsidies.

    Highlights Paper presents a method to decompose cost efficiency based on regulations and subsidy. It decomposes allocative and technical inefficiencies among their sources. Transit systems have 51.7% cost efficiency, 88.4% technical efficiency and 58.5% allocative efficiency. Those that internalize input subsidy compared to input regulations are more efficient.


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    Titel :

    Effects of government regulations and input subsidies on cost efficiency: A decomposition approach


    Beteiligte:
    Obeng, K. (Autor:in) / Sakano, R. (Autor:in)

    Erschienen in:

    Transport Policy ; 91 ; 95-107


    Erscheinungsdatum :

    2020-03-30


    Format / Umfang :

    13 pages




    Medientyp :

    Aufsatz (Zeitschrift)


    Format :

    Elektronische Ressource


    Sprache :

    Englisch