The efficiency of Brazilian railway system: an application of Data Envelopment Analysis

• Main Author: Brum, Maria Cecilia da Silva
• Publication Date: 2022
• Other Authors: Alves, Tiago Wickstrom
• Format: Article
• Language: eng
• Source: Revista Ambiente Contábil
• Download full: https://periodicos.ufrn.br/ambiente/article/view/27714
• topic: efficiency, railway transport, DEA..; The efficiency of Brazilian railway system: an application of Data Envelopment Analysis.; eficiencia, transporte metro-ferroviario, DEA..; Eficiencia del sistema de transporte metro-ferroviario brasileño: una aplicación del Análisis Envolvente de Datos.; eficiência, transporte metroferroviário, DEA..; Eficiência do sistema de transporte metroferroviário brasileiro: uma aplicação da Análise Envoltória de Dados .

Purpose: To analyze the technical efficiency of Brazilian railway companies. Methodology: The technical efficiency of Brazilian railway companies was analyzed through Data Envelopment Analysis (DEA), using the window analysis approach, and considering the Variable Returns of Scale model. The study examined eight companies during a five-year period, which totalizes 90% of the railway passengers in that timespan. The main inputs and outputs of railway systems referred in the international literature were used as variables. Results: Only railway companies classified as large can be considered technically efficient. Among them, São Paulo’s metro system was the only one that remained efficient throughout the years analyzed. Medium-sized companies were inefficient in all years of the sample, showing the necessity to reduce their inputs by an average of 19% in order to become technically efficient. The inclusion of financial variable as an input did not significantly change the efficiency indexes assessed. The study reveals the prevalence of increasing returns to scale in the Brazilian railway system. Contributions of the Study: This study identifies potential improvements for the companies considered inefficient and reveals they are medium-sized and state-owned, with high-cost financing from government resources. It is also a benchmark for further research on the topic, given the importance of identifying the effect of funding transport operations with government resources on companies’ efficiency. In this context, considering this study identifies the prevalence of increasing returns to scale in the Brazilian railway system, it contributes to the analysis of public policies associated with population access to this means of transportation, as constant returns to scale suggests that production increase, which has the number of carried passengers as the main variable, can generate benefits for the companies in terms of efficiency.