A stepwise-projection data envelopment analysis for public transport operations in Japan

Tightening public expenditure budgets prompt a need for a careful analysis of the performance of public bodies in terms of an efficient execution of their tasks. A standard tool to judge the efficiency of such organizations is Data Envelopment Analysis (DEA). In the past years, much progress has been made to extend this approach into various directions. Examples are the Distance Friction Minimization (DFM) model and the Context-Dependent (CD) model. The DFM model is based on a generalized distance friction function and serves to improve the performance of a Decision Making Unit (DMU) by identifying the most appropriate movement towards the efficiency frontier surface. Likewise, the CD model yields efficient frontiers in different levels, while it is based on a level-by-level improvement projection. The present paper will first offer a new integrated DEA tool—emerging from a blend of the DFM and CD model—in order to design a balanced stepwise efficiency-improving projection model for a conventional DEA. The above-mentioned stepwise-projection model is illustrated on the basis of an application to the efficiency analysis of public transport operations in Japan.