Estimating the efficiency of the Portuguese bus industry

Abstract

In this paper, we analyse the technical efficiency of a sample of Portuguese bus transport companies with a Cobb- Douglas cost frontier model. The model generates efficiency scores in a simultaneous two-stage procedure. We conclude that inputs and outputs play a major role in transport efficiency and find that the efficiency scores are time-varying and high for some companies but low for others. We therefore suggest an alteration to management procedures so that efficiency can be increased, based on an effective enhanced-incentive policy and taking into account the characteristics of the sample. (A)