IDEAS home Printed from https://ideas.repec.org/a/ags/ndjtrf/206899.html
   My bibliography  Save this article

International Airports: Economies of Scale and Marginal Costs

Author

Listed:
  • Martín, Juan Carlos
  • Voltes-Dorta, Augusto

Abstract

Regarding some regulation fields, such as optimal investments and pricing policies, marginal cost estimations for infrastructure-intensive transport services is always a challenging task. The lack of comparable data among airports is one of the causes which could explain the relative scarcity of this literature in the past. In this paper, the returns to scale and marginal costs are estimated using single-and multi-product translog specifications of a long-run cost function. A pooled database of financial data on 41 airports across Europe, North America, Asia, and Australia for the period 1991-2005 was used. Significant economies of scale and little degree of technological progress are found using Work Load Units (WLU) and Air Traffic Movements (ATM) as output measures. Additionally, individual long-run marginal cost estimates are provided for each output measure, and for every airport under study.

Suggested Citation

  • Martín, Juan Carlos & Voltes-Dorta, Augusto, 2008. "International Airports: Economies of Scale and Marginal Costs," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 47(1).
    • Handle: RePEc:ags:ndjtrf:206899
    DOI: 10.22004/ag.econ.206899
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/206899/files/1056-1166-1-PB.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.206899?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
    2. Link, Heike & Nilsson, Jan-Eric, 2005. "Infrastructure," Research in Transportation Economics, Elsevier, vol. 14(1), pages 49-83, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Ennen & Irem Batool, 2017. "Airport Efficiency in Pakistan - A Data Envelopment Analysis with Weight Restrictions," Working Papers 25, Institute of Transport Economics, University of Muenster.
    2. Gurtner, Gérald & Cook, Andrew & Graham, Anne & Cristóbal, Samuel, 2018. "The economic value of additional airport departure capacity," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 1-14.
    3. Button, Kenneth, 2020. "The economics of Africa's floriculture air-cargo supply chain," Journal of Transport Geography, Elsevier, vol. 86(C).
    4. Martín, Juan Carlos & Voltes-Dorta, Augusto, 2011. "The econometric estimation of airports' cost function," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 112-127, January.
    5. Mathisen, T.A. & Jørgensen, F. & Solvoll, G., 2014. "Marginal costs pricing of airport operations in Norway," Research in Transportation Economics, Elsevier, vol. 45(C), pages 49-56.
    6. Sheard, Nicholas, 2017. "Airport consolidation and the provision of air services," Journal of Air Transport Management, Elsevier, vol. 60(C), pages 31-44.
    7. Ennen, David & Batool, Irem, 2018. "Airport efficiency in Pakistan - A Data Envelopment Analysis with weight restrictions," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 205-212.
    8. Niemeier, Hans-Martin, 2021. "Is economics good for aviation policy? Some problems in bridging the gap between theory and policy," Journal of Air Transport Management, Elsevier, vol. 96(C).
    9. Kutlu, Levent & McCarthy, Patrick, 2016. "US airport ownership, efficiency, and heterogeneity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 89(C), pages 117-132.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin, Juan Carlos & Voltes-Dorta, Augusto, 2007. "Marginal Cost Estimations In Airports. Multiproductive Cost Functions And Stochastic Frontiers: An International Airports Case Study," 48th Annual Transportation Research Forum, Boston, Massachusetts, March 15-17, 2007 207931, Transportation Research Forum.
    2. Röhl, Klaus-Heiner, 2000. "Der Aufbau der ostdeutschen Infrastruktur und sein Beitrag zur wirtschaftlichen Entwicklung in Sachsen," Discussion Papers 2/2000, Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics.
    3. Valentin Zelenyuk, 2023. "Productivity analysis: roots, foundations, trends and perspectives," Journal of Productivity Analysis, Springer, vol. 60(3), pages 229-247, December.
    4. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    5. Frédéric Reynès, 2011. "The cobb-douglas function as an approximation of other functions," SciencePo Working papers Main hal-01069515, HAL.
    6. Cordoba, Jose M. & Hammond, Peter J., 1998. "Asymptotically strategy-proof Walrasian exchange," Mathematical Social Sciences, Elsevier, vol. 36(3), pages 185-212, December.
    7. Geweke, John & Petrella, Lea, 2014. "Likelihood-based inference for regular functions with fractional polynomial approximations," Journal of Econometrics, Elsevier, vol. 183(1), pages 22-30.
    8. Chatura Sewwandi Wijetunga, 2016. "Rice production structures in Sri Lanka: The normalized translog profit function approach," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 6(2), pages 21-35, February.
    9. Barnett, William A. & Serletis, Apostolos, 2008. "The Differential Approach to Demand Analysis and the Rotterdam Model," MPRA Paper 12319, University Library of Munich, Germany.
    10. Zhang, Wei & Alston, Julian M., 2013. "Factor Substitution and Technical Change in the U.S. Dairy Processing and Manufacturing Industry," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150707, Agricultural and Applied Economics Association.
    11. Binswanger, Hans P., 1972. "The Measurement Of Biased Technical Change In The Many Factors Case: U.S. And Japanese Agriculture," Staff Papers 13786, University of Minnesota, Department of Applied Economics.
    12. Lachaal, Lassaad & Chebil, Ali & Dhehibi, Boubaker, 2005. "Measuring factor substitution and technological change in the Tunisian agricultural sector, 1971 - 2000," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 6(2), pages 1-11.
    13. Odolinski, Kristofer & Boysen, Hans E., 2018. "Railway line capacity utilisation and its impact on maintenance costs," Working papers in Transport Economics 2018:10, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 30 Oct 2018.
    14. Sébastien Marchand, 2011. "Technical Efficiency, Farm Size and Tropical Deforestation in the Brazilian Amazonian Forest," Working Papers halshs-00552981, HAL.
    15. Daniel Bilodeau & Pierre‐Yves Crémieux & Pierre Ouellette, 2002. "Hospital Technology in a Nonmarket Health Care System," Southern Economic Journal, John Wiley & Sons, vol. 68(3), pages 511-529, January.
    16. Erik Biørn & Petter Frenger, 1992. "Expectations, substitution, and scrapping in a putty-clay model," Journal of Economics, Springer, vol. 56(2), pages 157-184, June.
    17. Peter Broer, 2004. "The Elasticities of Complementarity and Substitution," Tinbergen Institute Discussion Papers 04-101/1, Tinbergen Institute.
    18. Michaelides, Panayotis G. & Vouldis, Angelos T. & Tsionas, Efthymios G., 2010. "Globally flexible functional forms: The neural distance function," European Journal of Operational Research, Elsevier, vol. 206(2), pages 456-469, October.
    19. Michaelides, Panayotis G. & Tsionas, Efthymios G. & Vouldis, Angelos T. & Konstantakis, Konstantinos N., 2015. "Global approximation to arbitrary cost functions: A Bayesian approach with application to US banking," European Journal of Operational Research, Elsevier, vol. 241(1), pages 148-160.
    20. Link, Heike & Götze, Wolfgang & Himanen, Veli, 2009. "Estimating the marginal costs of airport operation using multivariate time series models with correlated error terms," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 41-46.

    More about this item

    Keywords

    Public Economics;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ndjtrf:206899. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: http://www.trforum.org/journal/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.