Total Factor Productivity Analysis of Public Transit

摘要

Improvement of transit performance depends first on the ability to measure performance levels. The paper introduces the concept of total factor productivity as a unified measure of transit performance. The approach uses the shift in the cost function of inputs and outputs as the measure of change in productivity. A three stage least-squares estimation procedure was used to estimate model parameters. The technique was applied to 20 transit systems. Data was analyzed for the most recent 26 year period. Results indicate that there are no consistent trends in total factor productivity. Productivity seems to increase and decrease in similar amounts year by year indicating that there is little change. This supports the hypothesis that there has been little technological improvement in the industry and that management decisions tend to compensate for productivity changes so that productivity remains stable over time when total inputs and outputs are investigated.