Accounting for accidents in the measurement of transport inefficiency: a case of Taiwanese bus transit

Abstract

Conventional data envelopment analysis (DEA) measuring transport efficiency (or inefficiency) has impractically assumed that accidents are freely disposable. The present paper attempts to rectify this impractical assumption by proposing directional output distance function models into which different types of casualties are factored. The core logic is to convert different types of casualties – fatality, heavy injury, light injury, property loss – to an aggregated accident index and then to incorporate the index into the DEA modelling. The Taipei bus transit system was investigated. Our results show that the inefficiency scores as well as the number of efficient bus firms with and without accounting for accidents have significant difference. Based on the results, the inefficient bus firms should not merely increase their desirable outputs; they should also improve the safety records so as to improve the technical efficiency.