The Effect of COVID-19 on the Efficiency of Intercity Bus Operation: The Case of Chungnam

Abstract

This paper estimates the efficiency of operating intercity bus lines in Chungnam province over the period 2017–2020, and then empirically analyzes the determinants of the efficiency. In particular, it evaluates to what extent the efficiency in 2020 decreased due to COVID-19 and which characteristics of lines (length of a line, frequency of operation, whether a line operates via highways and includes the capital region or not) affected the efficiency during the pandemic through a tobit model. The empirical results show that the efficiency in the operation of intercity bus lines in Chungnam was higher in 2018 and 2019 compared to 2017, but dropped in 2020 by 15.8%. It appears that the efficiency is higher when a line operates more frequently and covers a longer distance, but the efficiency increases at a decreasing rate as the operating distance becomes longer. In addition, the difference in the efficiency according to operating distance due to COVID-19 seems to be statistically significant. Given that intercity bus lines are heavily dependent upon a (local) government’s financial support and the amount of this support needs to reflect the degree to which the efficiency has decreased due to COVID-19 as an external shock, it is important to precisely estimate the magnitude of the efficiency reduction from both a policy and academic standpoint.