Assessing efficiency of transit service

In the past few decades, the market share of bus passengers has declined, while many transit services have expanded. Furthermore, wage rates and other costs of labor such as benefits have been increasing, and regulations relating to the environment and Americans with disabilities have been enacted. This has fueled a systemic decline in productivity of agencies providing bus service. With increasing pressures on public agencies to be accountable to taxpayers and constrain resources, the efficiency of transit agencies must be addressed. The measurement of productivity is the initial step that must be taken toward improved performance. The authors use data envelopment analysis (DEA), a linear programming technique, to estimate the relative efficiency of transit agencies providing motor bus service. DEA is a nonparametric approach, used to and generate a best practice frontier and rank decision-making units (DMUs). The agencies that are efficient comprise the frontier and those that are not are ranked according to how far they are from their best practice counterpart on the frontier. The results generated from the DEA model are part of the first phase of the transit productivity study the authors have undertaken. Subsequent phases will examine other measurement techniques such as total factor productivity and econometric estimation of scale and scope economies.