This paper assesses the impact of environmental factors on the efficiency of public transit system within a DEA-based mixed framework. Using a sample of 100 Italian companies, we implement a modify two-stage method in order to examine the impact of environmental effects into DEA inefficiency measures. From methodological point of view we pay attention to specification model and mix-size problem (e.g. outliers). We also focus on requested exogenity of environmental variables. The results point out the relevance of external effects with particular reference to urban environment and geographical location. Finally some policy implications are discussed.
Keywords: DEA, environmental effects, local public transport, scale efficiency
Jel Code: D24, C44.