Cost Efficiency Measurement of Bus Routes by Stochastic Cost Frontier Method

摘要

The cost efficiency measurement of bus routes is essential for the regulators to establish aneffective subsidy mechanism. This study endeavours to incorporate the heterogeneous outputsand operating environment factors into the cost efficiency measurement framework bystochastic cost frontier method. In addition, it introduces four new operating environmentfactors at the microscopic level. The purpose is to impartially measure the cost efficiency ofbus routes, so as to provide a useful practical tool with regard to the establishment of subsidymechanism for the regulators. An empirical analysis based on 39 routes operated in JiangyinCity, China has been presented. The principal finding is that, generally, the increase in vehiclekilometers, fixed inputs, and fuel price, results in higher total operating costs of bus routes.Specially, vehicle kilometers have a bigger impact on total operating costs than otherparameters. Additionally, route length, the percentage of priority lanes, and average pureoperating speed are favorable for the improvement of cost efficiency. The average intersectiondensity, average bus stop density, and average dwell time per bus stop are unfavorable for theimprovement of cost efficiency. Finally, the measurement of the cost efficiency enables toidentify the difference between the actual total operating costs and efficient total operatingcosts at the bus routes level. The results could substantially support the regulators inimproving bus service design, especially establishing of an effective subsidy mechanismbased on efficient total operating costs.