Efficiency Measurement and Determinants of the Public Transport Industry in Tunisia

This paper uses data envelopment analysis (DEA) to investigate the efficiency of the public transport sector in Tunisia over the period 2000–2010 (Stage 1 Analysis—Cost Efficiency Estimation). Cost efficiency of the regional transport companies (RTC) is measured by the use of three input and two output variables. Capital (fleet size), labour and energy are considered as inputs and the number of seats per kilometre and turnover as outputs. The major findings showed that there are 4.7–43.6 % inefficiencies in these RTCs under the cost specification “variable returns to scale”. Besides, in the second stage of our study, we attempt to shed light on the determinants of efficiency. Our results indicate that the RTCs’ efficiency has not improved by increasing financial performance (return of equity (ROE)) and the number of trips. This means that the RTCs are not making the best use of the production factors and that the subsidy granted by the State negatively and indirectly affected (The lack of the managers and employees motivation is due to the belief that the government certainly funds the annual deficits through a subsidy) these companies’ financial performance. © 2014, Springer Science+Business Media New York.