Evaluating the performance of mass transit firms: a cross section time series analysis

摘要

Understanding the nature of costs and the underlying production technology is important in every regulated industry both for policy makers and firms. Policy makers may be interested in the existence of scale economies for pricing reasons, while firms may be interested in the cost effects of introducing new services or discontinuing existing ones. Moreover, there is a debate about privatization. Most transit systems in the United States are publicly owned and generally operated by city, county or state-wide agencies. A finding of diseconomies of density may imply that, for example, a city can have different parts of its system operated by separate companies without suffering any unit cost increase. These results, along with information on elasticities, average cost, marginal cost, optimal fleet, can be extracted from the underlying cost and production functions of the transit systems.