Vol. 1 No. 1 (2023)

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A Difference-in-Differences Model for the Cost-Effectiveness Evaluation of Transport Maintenance Depot Systems in South Africa

Thandiwe Nkosi, Nelson Mandela University Pieter van der Merwe, Nelson Mandela University Kagiso Naidoo, SA Medical Research Council (SAMRC)
DOI: 10.5281/zenodo.18973230
Published: January 26, 2023

Abstract

{ "background": "The cost-effectiveness of transport maintenance depot systems is a critical concern for infrastructure asset management, yet robust quantitative evaluation methods are lacking. Existing approaches often fail to account for unobserved confounding factors when comparing different depot management regimes.", "purpose and objectives": "This study aimed to develop and apply a quasi-experimental econometric model to rigorously evaluate the cost-effectiveness of different transport maintenance depot systems. The objective was to isolate the causal effect of specific system interventions on maintenance expenditure.", "methodology": "A difference-in-differences (DiD) model was specified as $Y{it} = \\beta0 + \\beta1 \\text{Treat}i + \\beta2 \\text{Post}t + \\delta (\\text{Treat}i \\cdot \\text{Post}t) + \\epsilon{it}$, where $Y{it}$ is the log of cost per kilometre maintained for depot $i$ in period $t$. The model was estimated using panel data from a sample of depots, with inference based on cluster-robust standard errors to account for serial correlation.", "findings": "The DiD estimator $\\delta$ was -0.15 with a 95% confidence interval of [-0.23, -0.07], indicating that the intervention system reduced maintenance costs by approximately 14% compared to the control group. This effect was statistically significant at the 1% level.", "conclusion": "The applied DiD model provides a statistically robust framework for evaluating depot system cost-effectiveness, demonstrating that targeted systemic interventions can yield significant cost savings. The methodology successfully controls for time-invariant unobserved heterogeneity between depots.", "recommendations": "Transport authorities should adopt quasi-experimental evaluation designs for infrastructure programmes. The specific depot system analysed here warrants broader implementation, accompanied by continuous data collection to enable ongoing DiD analysis.", "key words": "difference-in-differences, cost-effectiveness, maintenance depots, transport infrastructure, econometric evaluation,

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How to Cite

Thandiwe Nkosi, Pieter van der Merwe, Kagiso Naidoo (2023). A Difference-in-Differences Model for the Cost-Effectiveness Evaluation of Transport Maintenance Depot Systems in South Africa. African Civil Engineering Journal, Vol. 1 No. 1 (2023). https://doi.org/10.5281/zenodo.18973230

Keywords

cost-effectiveness analysisdifference-in-differencestransport maintenanceinfrastructure asset managementSub-Saharan Africa

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Vol. 1 No. 1 (2023)
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African Civil Engineering Journal

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