Analyzing the Total Productivity Change in Travel Agencies

Abstract

This article estimates changes in total productivity in travel agencies in two stages. In the first stage, it breaks down total productivity into technically efficient change and technological change by means of data envelopment analysis (DEA) applied to a representative sample of travel agencies operating in the Portuguese market. The aim of this procedure is to seek out those best practices that will lead to improved performance in the market. We rank the companies according to their change in total productivity for the period 2000–2004, concluding that some companies experienced productivity growth while others experienced a decrease in productivity. In the second stage, the inefficient scores are regressed into contextual variables of inefficiency with a bootstrapped Tobit model. The implications arising from the study are considered in terms of managerial policy.