Measuring the efficiency of Britain's privatised train operating companies

Affuso, L, Angeriz, A and Pollitt, M. (2002) Measuring the efficiency of Britain's privatised train operating companies. Working Paper. London Business School Regulation Initiative Working Paper Series.

Abstract

Twentyfive operating companies (TOCs) were created between 19941997, as part of the restructing process of the railway industry in Great Britain. The TOC operate monopoly franchises for the provision of passengers of passenger rail services over certain routes some of which continue to receive government subsidies. This paper investigates how the efficiency of these train operating companies has evolved over the period since privatisation using data envelopment analysis (DEA) and corrected ordinary least squares (COLS). Our data allows us to look at the evolution of relative efficiency and productivity through the privatisation and to perform secondstage regression analysis of the effciency scores using safety, quality and environmental data. The analysis sheds some light on the success and failures of the UK's most controversial privatisation to data