This investigation offers a first empirical study comparing the allocative efficiency in European railways. It also intends to determine to what extent this efficiency is sensitive to the regulating framework in which it performs its activity. To achieve these aims, we have estimated a system of equations formed by an input distance function and cost shares associated, using a panel data with 17 European railways. From the results, we can deduce that there is persistent allocative inefficiency, above all as a result of the underutilisation of labour input and the overutilisation of capital input and energy. We have associated this inefficiency with the institutional autonomy of each European railway. Our conclusion is that the efficiency increases when the degree of independence that the companies enjoy is greater.
 
Keywords: European railways, allocative efficiency, distance function, regulation.
JEL Classification:  L51, L92, C33, D24