Technical Characteristics and Efficiency of the Indian State Road Transport Undertakings

Abstract:     
The aim of this study is twofold. First, it aims to put forward new information concerning the technical characteristics of State Road Transport Undertakings (henceforth, STUs) on the basis of a sample of medium and large-size Indian states. Second, it aims to analyze the level of productive efficiency of those undertakings. It is hoped that results will be useful in evaluating the possible changes in public policies relating to passenger road transport in India.

The analysis is based on estimation of a cost function. The sample is made up of a panel data set taking observations of nine STUs that operated during the period 1983-84 to 1996-97. The specified functional form is translogarithmic. The output is measured as revenue pass.-kms. The cost function includes the network length for each STU, hence permitting evidence concerning returns to density and returns to scale. The use of panel data permits us to estimate the cost function, taking into account that each STU is affected by the specific characteristics of each individual state, the different features of the network and by different levels of productive efficiency. The long-run economies of scale is calculated by taking into account the effects of size on the fixed costs. Finally, we analyzed the relative efficiency of the STUs and the factors, which are most likely to affect it.

Number of Pages in PDF File: 20

JEL Classification: L92, L98, L32, L12, C33, C23, R42, R48

working papers series