Measuring the Efficiency of Public Road Transport Companies in the Slovak Republic Using DEA and SFA

The paper measures and compares the efficiency of companies providing public road transport in the Slovak Republic. For this purpose two rather complementary methods, namely data envelopment analysis (DEA) and stochastic frontier analysis (SFA), are used. An input-oriented slack based model under variable returns to scale is applied as a DEA efficiency measure. The validity of DEA results is confirmed by the stability analysis consisting of re-calculation of DEA under different combinations of inputs and outputs. Identified efficient decision making unites are ranked using super-efficiency. A SFA model is based on the well-known Cobb-Douglas function type, assuming normally distributed errors and half-normally distributed inefficiencies. In order to overcome the multicolinearity problem principal component analysis is applied. Finally, we identify transport companies efficient with respect to both methods.