STOCHASTIC FRONTIER MODELS FOR PUBLIC TRANSPORT

In the Netherlands a study was carried out to identify factors which have an effect on the level of public transport subsidies to cities and regions and to examine whether inefficiencies exist in this sector. Stochastic frontier production and cost functions were estimated. The results suggest that structural characteristics such as address density play a role in explaining the operating costs. Indications for the existence of inefficiencies were found in all firms and regions.