A DEA approach for evaluating the efficiency and effectiveness of urban transit systems

The need to measure transit system performance along with its various dimensions has led to the development of a large number of quantitative performance indicators. However, depending upon the specific indicator examined, different conclusions can oftentimes be reached regarding performance. Further, although performance and scale economies are closely related issues, they have been generally examined separately in the transit literature. The research reported in this paper uses data envelopment analysis and globally efficient frontier production functions to investigate two important issues in transit operations: first, the relationship between the two basic dimensions of performance, namely efficiency and effectiveness; second, the relationship between performance and scale economies. Using data from 256 US transit systems over a five-year period the results indicate that efficiency and effectiveness are positively related. Further, they imply that the magnitude of scale economies depends on the output specification.