The relative efficiency of public versus private municipal bus firms: An application of data envelopment analysis

This article has employed the data envelopment analysis method to evaluate the efficiency of the five bus firms in Taipei city. When vehicle kilometers (revenue or the measure combining vehicle kilometers, revenue and the number of traffic trips on routes) was used as the output measure, it concluded that the publicly owned Taipei Municipal Bus had increased (not increased) its technical efficiency after the government liberalized the urban bus market. This article also found that in both the one output (vehicle kilometers) and three outputs cases, Taipei Municipal Bus had, on an average, lower efficiency scores than the private firms, and that while each firm usually employed a linear production technology for several, consecutive years the private firms were more flexible in adopting different technologies.