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The Effect of Governance Forms on North American Airport Efficiency: A Comparative Analysis of Airport Authority vs. Government Branch

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  • Zhao, Qi
  • Choo, Yap Y.
  • Oum, Tae H.

Abstract

This paper applies a stochastic cost frontier model to a panel of 54 major airports over 2002-2008 to examine how the two dominant governance forms of publicly owned airports in the United States and Canada, namely, operation and governance by a government (city, county, or state) branch, or by an airport authority, affect airport efficiency performance. Our key findings are (a) airports operated by an airport authority achieve higher cost efficiency (on average, 14% higher technical efficiency) than those operated by a government branch; (b) airports operated by a government branch have lower labor share than those operated by an airport authority; and (c) there is no statistically significant difference in the efficiency performance between airports operated by U.S. airport authorities and Canadian airport authorities.

Suggested Citation

  • Zhao, Qi & Choo, Yap Y. & Oum, Tae H., 2014. "The Effect of Governance Forms on North American Airport Efficiency: A Comparative Analysis of Airport Authority vs. Government Branch," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 53(2).
    • Handle: RePEc:ags:ndjtrf:207437
    DOI: 10.22004/ag.econ.207437
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    Citations

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    Cited by:

    1. Karanki, Fecri & Bilotkach, Volodymyr, 2024. "The impact of Airport business practices and governance forms on excess capacity," Economics of Transportation, Elsevier, vol. 38(C).
    2. Karanki, Fecri & Lim, Siew Hoon, 2020. "The effects of use agreements on airport efficiency," Journal of Air Transport Management, Elsevier, vol. 84(C).
    3. Karanki, Fecri & Lim, Siew Hoon, 2021. "Airport use agreements and cost efficiency of U.S. airports," Transport Policy, Elsevier, vol. 114(C), pages 68-77.
    4. Kim, Serena Y., 2020. "Institutional arrangements and airport solar PV," Energy Policy, Elsevier, vol. 143(C).
    5. Karanki, Fecri, 2024. "Cross-subsidization and U.S. airports," Transport Policy, Elsevier, vol. 145(C), pages 150-160.
    6. Lim, Siew Hoon & Karanki, Fecri, 2020. "Airport use agreement types and input and output slacks: The case of U.S. airports," Research in Transportation Economics, Elsevier, vol. 84(C).
    7. Martini, Gianmaria & Scotti, Davide & Viola, Domenico & Vittadini, Giorgio, 2020. "Persistent and temporary inefficiency in airport cost function: An application to Italy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 999-1019.
    8. VikniswariVija Kumaran* & Yew Yao Xi & Fan Sui Feng & Ho Xiao Jin & MakKah Weng & Teh Chun Pin & Shelena Soosay Nathan, 2018. "Measuring the Technical Efficiency of Oceania Continent Airports: Does Workload Unit Matters?," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 1120-1124:6.
    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.

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    Keywords

    Public Economics;

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