Despite these commonly held views, contracted service only
yields moderate cost savings. In a study of 400 transit agencies spanning a 10 year period from 1992 to 2002, partially contracted service yielded a 7.8% cost savings while contracting all service yielded only a 5.5% savings.<ref name="Iseki 2004">Iseki, Hiroyuki (2004), “Does Contracting Matter? The Determinants of Contracting and Contracting’s Effects on Cost Efficiency in US Fixed-Route Bus Transit Service”, University of California, Los Angeles, unpublished dissertation.</ref> Research has also shown a strong self selection bias to be present among transit agencies. If an agency can achieve cost savings through contracting either a part or all of its service, it will do so. Thus, agencies cannot necessarily look to other agencies for guidance on the choice of contracting.