TECHNICAL EFFICIENCY IN MULTI-MODE BUS TRANSIT: A PRODUCTION FRONTIER ANALYSIS

This paper studies the efficiency of U.S. multi-mode bus transit systems by asking whether they could expand their service (outputs) without requiring additional resources (inputs); or whether they could reduce input utilization without having to reduce service. A system which can do neither is said to be "technically efficient". The technological possibilities facing the industry are identified by computing a piecewise-linear best-practice production frontier exhibiting variable returns to scale and weak disposal. The findings indicate that 80% of the bus systems studied are technically efficient, and that the extent of inefficiency in the industry is slight.