Abstract
This paper considers railway operations in 23 European countries during 1995–2001, where a series of reform initiatives were launched by the European Commission, and analyses whether these reform initiatives improved the efficiency of the railway systems. Efficiency is measured using Multi-directional Efficiency Analysis, which enables investigation of how railway reforms affect the inefficiencies of specific cost drivers. The main findings are that the reform initiatives generally improve technical efficiency but potentially differently for different cost drivers. Specifically, the paper provides empirical evidence that accounting separation is important for improving the efficiency in the use of both material and staff costs, whereas other reforms only influenced one of these factors.
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Notes
Note that in 2007 the company reverted back into public ownership when the Estonian government bought back the 66% shares that had previously been sold to a private company.
While many studies employ second stage analysis of efficiency scores, especially (TOBIT) regressions, the use of such approaches have been challenged by e.g. Simar and Wilson (2007). We here still with some caution perform second stage analyses, and note that we here consider the full population and not a sample and therefore refrain from using bootstrapping techniques.
In the current data set there is no consistent trend in the annual averages of the efficiencies for the countries that did not implement new reforms during the study period. This supports the assumption of no general productivity improvements during the study period independently of reforms.
Since the MEA results report inefficiencies, a MEA score of zero means that the country is efficient.
The issue of relative wages is also considered explicitly in the following.
Whilst Italy in recent years has made substantial progress towards market opening, the effect is not evident within the current study period.
Note in Table 2 that Great Britain has the highest ratio of material- to staff costs.
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Asmild, M., Holvad, T., Hougaard, J.L. et al. Railway reforms: do they influence operating efficiency?. Transportation 36, 617–638 (2009). https://doi.org/10.1007/s11116-009-9216-x
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DOI: https://doi.org/10.1007/s11116-009-9216-x