MPRA, 2012, Paper No. 38136
This paper aims to analyse the impact of port demand variability on the allocative efficiency
of Spanish port authorities during the period 1986-2007. From a distance function model we
can obtain a measure of allocative efficiency using two different approaches: error
components approach and parametric approach. We model the variability of port demand
from the cyclical component of traffic series by applying the Hodrick-Prescott filter. The
results show that the inclusion of variability does not affect the efficiency measures, except in
the case of containerised general cargo. Moreover, we demonstrate that port authorities have
excess capacity and their resources are misallocated. Finally we establish that the allocative
inefficiency of Spanish port authorities is difficult to resolve given the limited substitution
possibilities among the different pairs of inputs.
