Cost structures of public transit systems: A panel data analysis

Results from numerous cost studies have generated conflicting results on public transit production technologies. Because prior studies have employed various sub-samples of public transit properties, the diverse results may either reflect alternative technologies or sampling differences. Based on a panel of nearly all transit systems reporting for Section 15 (US National Transit Data) purposes from 1986 to 1994, this paper explores whether public transit production technology differs by size and operating characteristics of the system. The results indicate that US transit properties are heterogeneous with different production technologies, which implies that transit cost analyses based upon a set of heterogeneous systems will generate incorrect inferences on public transit cost and production structures.