Accounting for emissions in the measurement of transit agency efficiency: A directional distance function approach

This paper uses a directional distance function approach to demonstrate the importance of considering a transit agency’s goal of reducing vehicular emissions as well as production of passenger or vehicle-miles, when measuring agency efficiency. This is especially critical given the increased emphasis policymakers may place on efficiency in the allocation of scarce public resources. The analysis includes 43 single mode US bus transit agencies for the year 2000. Results show only five agencies performing efficiently when emission abatement is not included in the analysis, but 22 firms are identified as efficient once emission abatement is considered. Consistent with previous studies, public agencies are found to be less efficient than private agencies, regardless of the efficiency measure used.