Empirical Analysis of the Effects of Ownership Model (Public vs. Private) on the Efficiency of Urban Rail Firms

Abstract

The discussion over public vs. private management in the operation of public transport has been on the research agenda for the past decade. Several studies have analyzed the benefits of private management; however, no study has analyzed the effects of the management model while controlling for other external factors such as economic crises and political factors. This study intends to focus on the impact of the ownership model (public vs. private) of urban rail firms on their efficiency, while expanding the existing literature by controlling for economic and political factors. The methodology consisted of the calculation of DEA scores and subsequent use of regression analysis to identify the main determinants. We used a data set of four Portuguese rail firms during the period 2009–2018 along with five distinct efficiency scores. The results show that privately managed firms tend to be more efficient, but with distinct behavior depending on the economic cycle. In periods of growing GDP, private firms lose their potential superiority over public firms. The results also show that election years and unemployment rate also play a role in understanding the efficiency scores of these firms.