Finn Jørgensen

ESTIMATING THE INEFFICIENCY IN THE NORWEGIAN BUS INDUSTRY FROM STOCHASTIC COST FRONTIER MODELS

A stochastic cost frontier function based on data from 170 of the 175 Norwegian subsidized bus companies is estimated under two alternative presumptions regarding the distribution of the inefficency among the bus operators. When the inefficiency is assumed to be half-normally distributed, the average inefficiency in the industry is estimated to be 13.7 per cent. This calculated value is nearly halved (7.2 per cent) when the exponential distribution is applied, while the ranking of the companies according to inefficiency is unchanged. By regressing the estimated inefficiency values for each company on some exogenous variables describing its ownership structure and the subsidy policy which it faces, it is seen that inefficiency of the companies which negotiate with the public authorities over the subsidy amounts is slightly higher than the inefficiency of the companies which face a subsidy policy based on cost norms. Our analysis gives, however, no significant differences in the efficiency between privately owned bus companies and publicly owned bus operators, and shows only minor economies of scale.

Demand models for inclusive tour charter: The Norwegian case

Abstract This article shows briefly the historical development of the Norwegian inclusive tour charter market. In addition, inclusive tour charter demand models for different seasons are developed and discussed. The explanation variables in these models are the income level of Norwegians, their expectations of income development, inclusive tour charter price level and summer weather conditions in Norway. Finally, the models are estimated by using Norwegian time-series data for the period 1969 to 1993.

The value of experience in research

This article examines how different factors influence the number of times articles in the five most recognized transportation journals are cited. The effects of most of the explanatory variables indicating the characteristics of articles, authors and journals correspond with earlier studies of citation counts. Special focus in this study is placed on estimating the relationship between researchers’ human capital or skills and their experience. For the purpose of this study, human capital is defined as a scientists ability to conduct research at the frontier of his or her discipline and is measured by how frequently his or her research is cited. Experience is measured by counting the number of their previous scientific articles. Using negative binomial regression, we find that experience offers a statistically significant positive effect on the human capital of scientists. However, this effect diminishes rapidly with the level of experience. This suggests that young researchers relatively quickly learn the skills and gain the knowledge necessary to produce high-quality research.

Using Standardized Revenue and Cost Norm Analyses to Reveal Subsidy Fraud in Contracted Public Transport Services

Abstract In 2004, one of the biggest ferry operators in Norway was found guilty of having intentionally attempted to defraud the state of about 113 million Norwegian kroner in subsidies by underreporting revenues and overstating costs during the period 1992–2002. The company and five of the top managers were convicted and the case was regarded as one of the most serious subsidy offences ever committed in Norway. The aim of this article is to show that standardized revenue and cost norm models from the state can deter operators from committing such offences and when relevant detecting the fraud attempts at an early stage. Our model suggests that the operator in question overstated costs by about 19% and that the actual subsidy fraud attempt was about three times higher than concluded by the Court.

Airport Charges – Interactions between Airlines and Airports

Abstract A substantial part of airports’ revenues relates to charges covering the costs of services supplied by the airport. Charges are imposed on carriers, which in turn pass them or a percentage of them, on to passengers. In the present chapter, special attention is given to regional airports characterized by low traffic volumes, enabling only one or a few carriers to serve each destination. A classic economic model is presented to analyze how the pass-on rate depends on supply and demand characteristics and market structure. Some illustrative examples assuming combinations of common specifications for market characteristics are also presented, showing pass-on rates ranging from 50% to more than 100%. Consequently, market structure and characteristics of carriers and passengers are decisive for how passengers experience changes in airport charges. The differences between the optimal charge from the perspectives of the airport and the welfare of society are specifically addressed. It is demonstrated that knowledge of the pass-on rate in the monopoly cases may be sufficient to infer how the mark-up will be affected by a change in marginal costs. Consequently, the understanding of the pass-on rate is relevant for airport owners and for decision-makers when considering the welfare of passengers and other politically stated goals.