AN INITIAL ANALYSIS OF TOTAL FACTOR PRODUCTIVITY FOR PUBLIC TRANSIT

Improvement of transit performance depends first on the ability to measure performance levels. Introduced is the concept of total factor productivity as a unified measure of transit performance. This concept uses the shift in the cost function 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 were analyzed for the most recent 26-year period. Results indicate that there are no consistent trends in total factor productivity. Productivity appears to increase and decrease in similar amounts year by year, indicating that there is little change. This supports the hypothesis that little technological improvement has occurred 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.