Comparing the costs of operating public transport services between different companies is not as easy as in manufacturing industries, due to the influence of exogenous factors. These factors (speed, network structure and demand pattern) account for some of the differences in cost and productivity. In this paper a methodology is applied to disentangle the effect of exogenous and endogenous factors on performance. An empirical application with a group of heterogenous companies (urban, in-tercity and rural) is carried out with results that show how it is possible to es-timate cost savings once the external effects have been eliminated.

Keywords: transport, subsidies, costs, efficiency, productivity.