Evaluating efficiency of subunits of state owned transport undertaking using data envelopment analysis

Abstract

Improving the performance of public transport undertakings is becoming more and more critical due to the paucity of public funds, increased demand on transport services and expanding social needs. Improving efficiency of the subunits of a transport system is one possible way to increase the overall efficiency of the system itself. In public transportation, multiple outputs are produced by multiple inputs and consequently, different rankings are obtained depending on different inputs and outputs considered for the calculation of efficiency. Thus it is possible to construct different efficiency measures using different outputs and inputs. This paper uses Data Envelopment Analysis to estimate a single efficiency score of the subunits of Andhra Pradesh Road Transport Corporation and provides policy prescriptions for improving the efficiency levels of those which are found to be inefficient.