The technical efficiency of container ports: Comparing data envelopment analysis and stochastic frontier analysis

Kevin Cullinane, Teng Fei Wang, Dong Wook Song, Ping Ji

Research output: Journal article publicationJournal articleAcademic researchpeer-review

362 Citations (Scopus)

Abstract

The efficiency of the container port industry has been variously studied utilising either Data Envelopment Analysis (DEA) or Stochastic Frontier Analysis (SFA). Given the strengths and weaknesses associated with these two approaches, the efficiency estimates and scale properties derived from these analyses are not always convincing. This paper applies both approaches to the same set of container port data for the world's largest container ports and compares the results obtained. A high degree of correlation is found between the efficiency estimates derived from all the models applied, suggesting that results are relatively robust to the DEA models applied or the distributional assumptions under SFA. High levels of technical efficiency are associated with scale, greater private-sector participation and with transhipment as opposed to gateway ports. In analysing the implications of the results for management and policy makers, a number of shortcomings of applying a cross-sectional approach to an industry characterised by significant, lumpy and risky investments are identified and the potential benefits of a dynamic analysis, based on panel data, are enumerated.
Original languageEnglish
Pages (from-to)354-374
Number of pages21
JournalTransportation Research Part A: Policy and Practice
Volume40
Issue number4
DOIs
Publication statusPublished - 1 May 2006

Keywords

  • Container ports
  • Data envelopment analysis
  • Efficiency
  • Production
  • Stochastic frontier analysis

ASJC Scopus subject areas

  • Civil and Structural Engineering
  • Transportation
  • Management Science and Operations Research

Cite this