01122538

Component

This study estimates total operating cost function of the paratransit service in a medium city, Greensboro, NC, employing two different cost functions, namely, the Cobb-Douglas and the translog cost function. The main advantage of this study is that the Greensboro Paratransit Agency can use the estimated equation(s) for generating forecasts of total operating costs and use those forecasts in preparing its quarterly or annual budgets. The sample period used for the estimation ranges from July 2001 to February 2007. The estimated results indicate that both the cost functions tracked the actual costs reasonably well. There are indications, according to the Cobb-Douglas function estimates, that scale economies are present in this particular paratransit agency in Greensboro. In terms of forecast performance, both the models did a good job in generating reasonably acceptable forecasts of operating costs in within sample forecasts. However, when it comes to within sample or out-of-sample forecasts, the translog cost function proved to be better than the Cobb-Douglas function because it has a signigicantly smaller RMSE (root mean squared error). Given the limitations of our study, one relatively small city, and data constraints, we think that the results of our study are preliminary and hence only indicative but not conclusive or fully operational

01120148

09-3043

English

19p

2009

Transportation Research Board 88th Annual Meeting

DVD

Figures (4) ; References; Tables (4)

Economic forecasting; Estimates; Logarithms; Operating costs; Paratransit services; Small cities

Cobb-Douglas function; Cost functions

Greensboro (North Carolina)

Economics; Planning and Forecasting; Public Transportation; I10: Economics and Administration

Transportation Research Board Annual Meeting 2009 Paper #09-3043

TRIS, TRB

Jan 30 2009 7:25PM