Comparing Efficiency Across State Transport Undertakings: A Production Frontier Approach

Indian Journal of Transport Management, Vol. 27, No. 3, pp. 374-391

21 Pages Posted: 28 Jul 2004

See all articles by Sanjay Kumar Singh

Sanjay Kumar Singh

Indian Institute of Management Lucknow

Anand Venkatesh

Goa Institute of Management

Abstract

Currently, in India, there are sixty-four State Transport Undertakings (STUs) operating in various states, which play a major role in providing short, as well as medium distance passenger mobility. The regulated environment in which STUs operate imposes many qualitative, as well as quantitative constraints on their production. Therefore, the STUs have relatively few incentives to produce efficiently. This study attempts to answer the question: "How efficient are the STUs?". In this study, an attempt has been made to quantify the technical efficiency (productive efficiency) of twenty-three major Indian State Transport Undertakings mainly providing rural and inter-city passenger transport services for the year 2000-01. This is done by the estimation of stochastic frontier production function using the method of maximum likelihood. We found that there is huge disparity in technical efficiency across STUs ranging from 56.15% for Madhya Pradesh State Road Transport Undertaking to 98.99% for Tamilnadu State Transport Corpn. Ltd. (Kumbakonam Division II). Average of technical efficiency scores of sample STUs was found to be 84.22%. The main conclusion in our analysis is that given the size distribution of the sample STUs and their working environment, the potential gain in productive efficiency for most of them is very high.

Keywords: State transport undertakings, production frontier models, technical efficiency

JEL Classification: L32, L92, O30, R40

Suggested Citation

Singh, Sanjay Kumar and Venkatesh, Anand, Comparing Efficiency Across State Transport Undertakings: A Production Frontier Approach. Indian Journal of Transport Management, Vol. 27, No. 3, pp. 374-391. Available at SSRN: https://ssrn.com/abstract=569521

Sanjay Kumar Singh (Contact Author)

Indian Institute of Management Lucknow ( email )

Lucknow, 226013
India
+91 522 273 6637 (Phone)
+91 522 273 4005 (Fax)

HOME PAGE: http://ganga.iiml.ac.in/~sanjay/

Anand Venkatesh

Goa Institute of Management ( email )

Taleigao, Goa - 403 206
India

Register to save articles to
your library

Register

Paper statistics

Downloads
172
Abstract Views
1,761
rank
174,153
PlumX Metrics