Measuring the Technical Efficiency of Railways in Developing Countries: A Two Stage- Bootstrap Data Envelopment Analysis

Abstract

This paper aims at measuring the technical efficiency of selected railways operating in developing countries over the period 2013-2018. We apply the Bootstrap Data Envelopment Analysis DEA to an Input-Output oriented model under Variable Return on Scale. In general, the findings suggest that the bootstrapping technique provides more consistent and realistic efficiency estimates, in contrast with the conventional DEA. In fact, the results show a technical efficiency score of 56,1 % for the sample which indicates that the observed railways could potentially reduce the usage of its inputs by 43,9 % on average  and reach high levels of production at the same time. We also notice the existence of significant gaps in technical efficiency across the observed railways. Finally, the results show a performance decline in most of the railways during the period of analysis with shifts representing occasional back and forth developments for other railways in the middle periods.