Has the efficiency of European railway companies been improved?

Abstract

The aim of this paper is to estimate the (in)efficiency of European railways, through an econometric estimation of frontier functions. The methodology used is the panel data method. The statistical source covers 19 companies observed over the period from 1965 to 1998. Two different specifications are estimated, first a “factor requirements function” and second a more flexible functional form “quadratic function”. Results indicate that the means of the efficiency indicator are around 0.6 and 0.4 for the factor requirement specification and the quadratic specification, respectively, and a great rate of technological progress over the period is also indicated.