Some determinants of cost efficiency in German public transport


Matthias Walter

Document Type

Journal Article

Publication Date


Subject Area

mode - tram/light rail, mode - subway/metro, place - europe, organisation - management, organisation - performance, economics - capital costs, economics - operating costs


cost efficiency, Germany, tram, light rail, metro


This paper evaluates cost efficiency and some of its managerial determinants in Germany's local public transport. A heteroscedastic stochastic frontier approach reveals that a high degree of tramcar utilisation and a high outsourcing degree influence the efficiency predictions positively. Mean efficiencies lie between 0.849 and 0.952, depending on the applied panel data models accounting for unobserved heterogeneity and observed heterogeneous output variables for tram, light railway, and metro services. The inefficiency levels correspond to a savings potential of between € 1.40 and 4.43 billion based on the € 28.23 billion total costs (in 2006 prices) for 254 observations of thirty-nine companies, 1997-2006.


Permission to publish this abstract has been given by Journal of Transport Economics and Policy (JTEP), coyright remains with them.