THE COSTS OF BUS OPERATIONS IN NORWAY

This study investigates the efficiency of Norwegian bus companies. The developed model permits the consideration of the effects on costs for differences in scale, technological conditions, ownership structure a nd subsidy policy. The principal findings are that (i) the average cos t function is slightly U-shaped; (ii) there is no statistically signif icant difference in costs between public and private companies; (iii) companies which are facing a subsidy policy based on cost norms show g reater efficiency than bus operators who negotiate with the authoritie s over the size of the subsidy; and (iv) the efficiency gain by introd ucing cost norms is significantly higher for companies in public owner ship than for privately owned companies.