• KSCE Journal of Civil and Environmental Engineering Research
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• v.34 no.5
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• pp.1559-1569
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• 2014

The purpose of this study is to estimate the degree of cost inefficiency for the urban railway lines of a metropolitan city operated by public institutions in Korea and identify the causes of this inefficiency. To this end, we assume that the urban railway lines produce the output of train-km by putting three production factors of labor, electric power and maintenance and set the variable cost function model with the translog function to make a stochastic cost frontier analysis. Based on estimated result, we conclude that the cost savings for 6 years of all lines are about 6,672 hundred million won and top five lines with high inefficiency are Busan Line1, Daegu Line1, Daejeon Line1, Gwangju Line1, and Daegu Line2. The causes of inefficiency are attributable to labor and maintenance factors. The results of this study can be useful in case of finding the priorities of measures and specific plans for reducing labor and maintenance costs in the urban railway operation.

• Journal of Korean Society of Transportation
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• v.25 no.6
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• pp.141-157
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• 2007

This paper evaluates the effects of privatization and deregulation on the firm-specific efficiency and total factor productivity (TFP) growth in the Korean and Japanese railways. Using a stochastic frontier approach and a generalized translog functional form, the paper specifies the equation system consisting of a multiproduct variable cost function and input share equations which is estimated with Zellner's iterative seemingly unrelated regression and the corrected least squares method. The Korean and Japanese railway firms are assumed to produce three outputs (Shinkansen passenger-kilometers, incumbent railway passenger-kilometers, ton-kilometers of freight) using three input factors (labor, fuel, maintenance and rolling stock). A monetary value of the ways and fixed installations held by the railroad firm is also included as a quasi-fixed input. The empirical results indicate that the average estimate of cost inefficiency is 2.57% for the total sample and on the average, JNR and JR Kyushu are found to be worst efficient while the most efficient railway firm in the sample is JR West. Also the cost efficiency levels of seven JRs have been improved after the reform and privatization of JNR. The findings also indicate that TFP growth of the privately-owned JRs are higher than those of the government-owned KNR and JNR. Three-island JRs and JR Freight have slightly higher TFP growth than Honshu JRs as well. Thus, the results suggest that managerial autonomy and increased competition via deregulation have improved efficiency and TFP growth.