Efficiency assessment of Japanese National Railways before and after privatization and divestiture using data envelopment analysis

Japanese National Railways (JNR) was privatized in 1987 and divided into six passenger companies one freight company. Before the structural reform, JNR a national monopoly that owned railroad assets provided transportation services throughout country under government regulation. The goal of reform to eliminate management inefficiency improve operational performance while attaining high quality at reasonable prices. To ascertain if this has been achieved, we examine Japan's railway before after privatization divestiture. Using data envelopment analysis on set from 1965 2017, calculated four types efficiency measures related cost, operations, revenue-earning profit-earning, by combining phases companies' business activities as input output: resource, output, total revenue. best our knowledge, study is first holistic companies, using assess effects deregulation. results reveal improvement cost remains vital issue for all increasing trend operations observed privatization. Mainland with an advantageous environment do not necessarily have higher efficiency, holding more room improvement. Further, found some may be derived shrinking equilibrium based potential decline demand, but such passive operation could hinder managerial efforts escape dependence subsidy.