Total factor productivity decomposition, input price inefficiencies, and public transit systems

摘要

This paper decomposes the rate of growth of total factorproductivity(TFP)in public transit systems among input demandeffects, an indirect output effect, an indirect technical change,pure scale effects and pure technical change. An application of thedecomposition to selected transit systems is provided. Theapplication shows that the effects of the changes in input priceinefficiencies on TFP are sizeable, and that the total subsidyeffects on TFP are larger than the total effects from utilitymaximization behavior. Furthermore, the traditional sources ofTFP(i.e., pure scale and technical change)reduce TFP and the Divisiaindex overestimates TFP in public transit systems.