Measuring total factor productivity of airports— an index number approach

There is an increasing trend towards corporatisation and privatisation of airports in an effort to improve performance. However, the normal financial reporting requirements associated with these forms of organisation are not sufficient indicators of the performance of airports since profitability can be more a function of the exercise of market power than a sign of productive efficiency. Also, there are concerns that efforts to regulate the prices charged by airports can result in under-investment and declining service standards. This makes it important to monitor the cost-efficiency, cost-effectiveness and service-effectiveness of airports. There is a growing literature on these topics, but so far there has been little attempt to apply the concepts of total factor productivity to the airport sector. We use a non-parametric index number method to illustrate how such a global measure can be used to investigate the role of disaggregated performance measures that often are very useful to managers and to those monitoring airport operations.     

The imbalance between car and public transport use in urban Australia: why does it exist?

Public transport in urban Australia is dominated by the automobile. As we approach the end of the 20th century, there is much renewed interest in revitalising urban public transport as one way of combating the increasing levels of traffic congestion, deterioration in air quality and global warming. This paper takes stock of the situation in Australia, identifying the challenges that the urban public transport sector faces in redressing the imbalance between car and public transport market share. Particular emphasis is given to the role of buses and busways in contrast to rail, and strategies to reduce the attractiveness of the car.     

Non-attendance and dual processing of common-metric attributes in choice analysis: a latent class specification

There is a growing literature that promotes the presence of process heterogeneity in the way that individuals evaluate packages of attributes in real or hypothetical markets and make choices. A centerpiece of current research is the identification of rules that individuals invoke when processing information in stated choice (SC) experiments. These rules may be heuristics used in everyday choice making as well as manifestations of ways of coping with the amount of information shown in choice experiment scenarios. In this paper, using the latent class framework, we define classes based on rules that recognise the non-attendance of one or more attributes, as well as on the addition and the parameter transfer of common-metric attributes. These processing strategies are postulated to be used in real markets as a form of cognitive rationalization. We use a SC data set, where car driving individuals choose between tolled and non-tolled routes, to translate this new evidence into a willingness to pay (WTP) for travel time savings, and contrast it with the results from a model specification in which all attributes are assumed to be attended to and are not added up with parameter preservation. We find that the WTP is significantly higher, on average, than the estimate obtained from the commonly used full relevance and attribute preservation specification.     

A comparative assessment of the productivity of Australia's public rail systems 1971/72–1991/92

There is a growing interest in the establishment of suitable measures of the overall performance of government business enterprises, particularly railways, which are a major recipient of government subsidy. They must improve their performance and become more cost efficient. Any policy designed to reduce costs must consider the implications of resultant actions on the overall productivity of a business. We propose the use of the total factor productivity index as an appropriate reference benchmark, to enable each railway to evaluate the productivity implications of any change to the operating and managerial environment. Using the Institute of Transport Studies' rail database, total factor productivity indices are derived annually from 1971/72 to 1991/92 for the 5 major public rail systems in Australia and sources of variation are identified.The paper recognizes the need to identify sources of variation in productivity which translate into operational guidelines for management in assisting them to improve performance over time. A contribution is the recognition of the importance of including both demand side (final output) and supply, side measures of output (intermediate output). Final output may be more important for monitoring the performance of an enterprise from a cost-effectiveness perspective, but a supply side measure is often more useful to operators because it is the dimension of output over which they have more control.The research reported in this paper was partially funded by an Australian Research Council grant (No. A78930595).     

The use of mixtures of market and experimental choice data in establishing guideline weights for evaluating competitive bids in a transport organisation

The government sector is increasingly using competitive bidding for service deliveries such as the provision of bus and rail services as well as the purchasing of professional engineering services such as project planning, design, and project supervision. As part of a program to simplify and introduce consistency in the tender evaluation process, one government transport agency in New Zealand financed a study to investigate the potential of combined revealed and stated preference methods as a way of establishing weights to attach to the criteria used to evaluate offers of engineering services. These techniques have mainly been used in the study of travel choices; yet they have a much broader appeal in studying the decision making process of organisations. In this paper we use a data-mixing model to capture the decision expertise of a transport organisation through the revelation of preference weights for each evaluation criterion. Using choice information based on both market-driven and experimentally derived choice sets, we should be able to increase the robustness of the evaluation weights in comparison to the weights obtained from single data-sourced models. The resulting parameterised tool can be used in subsequent tender evaluations to provide an additional source of advice to supplement or replace that provided by current members of a bid evaluation team.     

Under- and Postgraduate Education in Health Economics for Australia's Medical Practitioners: Time for Change?

Directly or indirectly, medical practitioners influence health-care policy and spending through their clinical decision-making. As medical expertise and technology has grown, and patient choice has been empowered by the consumer movement, there are now many more medical interventions than can be accommodated in a finite national health-care budget. We reviewed the Australian Medical Council, Medical School and Medical Specialist curricula. In Australia, medical students, doctors and medical specialists do not appear to have specific health economics education that would improve skills to select beneficial and cost-effective care. We propose a framework for medical practitioner health economics education.