An analysis of their qualitative differences between firms and their impacts on operating efficiencies in the urban bus transportation industry

The research presented in this study pursues two separate, related topics. First, utilizing cross sectional datat from 163 firms for the calendar year 1982, flexible form production and cost functions are derived for the intracity urban bus transportation industry. These relationships are identified as non-homogeneous, non-homothetic relationships, applying a revised quadratic logarithmicspecification for the production function and an unrestricted transcendental logarithmic specification for the cost function. Both of the specifications are statistically robust, yield consistently positive estimated values for output and cost for each firm in th esample, and yield coefficients which are consistent with neoclassical economic theories of producation and cost. Utilizing these models each firm's unique technical, cost, and overall efficiency indices are calculated through a ratio technique which accommodates non-homogeneous, non-homothetic specifications of the production and cost functions.

Second, using the estimated efficiency indicies as dependent variables in an ordinary least squares regression analysis, three identifiable models of the relationship between efficiency and firm-specific qualitative differentials are examined. The specific differences which are examined include levels of governamental subsidization, ratio of administrative to production personnel, presence of private producation, presence of a unionized labor force, various measures of a firm's size, and region where the firm is located.

The results of the analysis reveal that governmental subsidization, private sector producation, and deviations from a minimally optimal firm size are consistently inversely related with each estimated form of efficiency. consistently found to be directly related to each form of efficiency are the indicators of the firm's related to each form of efficiency are the indicators of the firm's capital utilization rate, and the presence of a unionezed labor force. The measure of administrative personnel is directly related to technical efficiency, but inversely related to both cost and overall efficiencies. Additionally, systematic regional differences in efficiencies are exhibited within the sample.