Cost Structure and efficiency of Local Public Transport: The case of Emilia Romagna bus companies

This paper presents evidence for scale inefficiency and overall cost inefficiency for 40 regional bus companies in a region of North Italy. A translog cost function for a five-year panel is estimated and measures of economies of scale and density are derived. The estimation results allow for a discussion of inefficiency in terms of sub-optimal scale and density. Overall cost inefficiency is estimated by means of a frontier cost function. The findings are discussed in the Italian political and regulatory context. (A)