| Sumario: | A study is conducted to analyze total factor productivity (TFP) in public transit systems and to decompose it among subsidy effects, scale or output effects, and the rate of technical change by building on previous methods that distinguished between private costs and actual costs. Cross-sectional data and an unbalanced panel of time series were drawn for single-mode bus systems in the U.S. Findings reveal that technical change is capital using, labor saving, and fuel saving, and the rate of technical change increases with higher capital subsidies and lower operating subsidies. Findings conclude that technical change through sources other than subsidies also increased the impact of technical change on TFP decline, and output or scale effect contributed more to the rate of change of TFP in absolute terms than any other variable.
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