DEA based estimation of the technical efficiency of state transport undertakings in India

Abstract

This paper measures the technical efficiency of public transport sector in India. The study makes an attempt to provide an overview of the general status of the State Transport Undertakings (STUs) in terms of their productive efficiency. Data have been collected for 35 STUs for the year 2004-2005. Technical efficiency of the STUs is measured by applying Data Envelopment Analysis (DEA) technique with the use of four input and three output variables. Fleet size, Total staff, Fuel consumption and Accident per lakh kilometer are considered as inputs and Bus utilization, Passenger kilometers and Load factor as outputs. On the basis of the status of technical efficiency, it is concluded that the performance of the STUs are good but still very far from the optimal level. The mean overall technical efficiency (OTE) is 83.26% which indicates that an average STU has the scope of producing the same output with the inputs 16.74% lesser than their existing level. Significant variation in OTE across STUs is also observed.