IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-08l50001.html
   My bibliography  Save this article

Price Cap Regulation of Airports: A New Approach

Author

Listed:
  • Kevin Currier

    (Oklahoma State University)

Abstract

Airports are typically monopolistic providers of aeronautical services. Hence, the widespread privatization of airports within the last 20 years has in general been accompanied by some form of price regulation of aeronautical services. A great deal of attention has been given to the issue of whether the aeronautical price cap should be based upon revenues from both aeronautical and commercial services (the “single-till” approach) or revenues from aeronautical services only (the “dual-till” approach). However, each of these regulatory schemes will in general lead to regulated prices that are Pareto inefficient. This paper presents a price capping scheme that systematically exploits the potential Pareto improvements available under either the single-till or dual-till regimes.

Suggested Citation

  • Kevin Currier, 2008. "Price Cap Regulation of Airports: A New Approach," Economics Bulletin, AccessEcon, vol. 12(8), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-08l50001
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2008/Volume12/EB-08L50001A.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brennan, Timothy J, 1989. "Regulating by Capping Prices," Journal of Regulatory Economics, Springer, vol. 1(2), pages 133-147, June.
    2. Achim Czerny, 2006. "Price-cap Regulation of Airports: Single-till Versus Dual-till," Journal of Regulatory Economics, Springer, vol. 30(1), pages 85-97, July.
    3. Tae Hoon Oum & Anming Zhang & Yimin Zhang, 2004. "Alternative Forms of Economic Regulation and their Efficiency Implications for Airports," Journal of Transport Economics and Policy, University of Bath, vol. 38(2), pages 217-246, May.
    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. Hangjun Yang & Anming Zhang, 2011. "Price-cap regulation of congested airports," Journal of Regulatory Economics, Springer, vol. 39(3), pages 293-312, June.
    2. Sismanidou, Athina & Tarradellas, Joan & Bel, Germà & Fageda, Xavier, 2013. "Estimating potential long-haul air passenger traffic in national networks containing two or more dominant cities," Journal of Transport Geography, Elsevier, vol. 26(C), pages 108-116.
    3. Ivaldi, Marc & Sokullu, Senay & Toru-Delibasi, Tuba, 2015. "Airport Prices in a Two-Sided Market Setting: Major US Airports," TSE Working Papers 15-587, Toulouse School of Economics (TSE).

    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. Hangjun Yang & Anming Zhang, 2011. "Price-cap regulation of congested airports," Journal of Regulatory Economics, Springer, vol. 39(3), pages 293-312, June.
    2. Marques, Rui Cunha & Brochado, Ana, 2008. "Airport regulation in Europe: Is there need for a European Observatory?," Transport Policy, Elsevier, vol. 15(3), pages 163-172, May.
    3. Jiang, Changmin & Zhang, Anming, 2015. "Airport congestion pricing and terminal investment: Effects of terminal congestion, passenger types, and concessionsAuthor-Name: Wan, Yulai," Transportation Research Part B: Methodological, Elsevier, vol. 82(C), pages 91-113.
    4. Basso, Leonardo J. & Zhang, Anming, 2007. "Congestible facility rivalry in vertical structures," Journal of Urban Economics, Elsevier, vol. 61(2), pages 218-237, March.
    5. Tiziana D'Alfonso & Valentina Bracaglia & Yulai Wan, 2015. "Airport cities and multiproduct pricing," DIAG Technical Reports 2015-14, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    6. Kidokoro, Yukihiro & Zhang, Anming, 2023. "Single-till regulation, dual-till regulation, and regulatory capture: When does a regulatory authority favor single-till regulation over dual-till regulation?," Economics of Transportation, Elsevier, vol. 33(C).
    7. Kidokoro, Yukihiro & Lin, Ming Hsin & Zhang, Anming, 2016. "A general-equilibrium analysis of airport pricing, capacity, and regulation," Journal of Urban Economics, Elsevier, vol. 96(C), pages 142-155.
    8. Martimort, David & Pommey, Guillaume & Pouyet, Jerome, 2022. "Optimal regulation design of airports: Investment incentives and impact of commercial services," Transportation Research Part B: Methodological, Elsevier, vol. 164(C), pages 25-44.
    9. Kidokoro, Yukihiro & Zhang, Anming, 2018. "Airport congestion pricing and cost recovery with side business," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 222-236.
    10. Xiao, Yibin & Fu, Xiaowen & Zhang, Anming, 2016. "Airport capacity choice under airport-airline vertical arrangements," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 298-309.
    11. Yang, Hangjun & Fu, Xiaowen, 2015. "A comparison of price-cap and light-handed airport regulation with demand uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 73(C), pages 122-132.
    12. Adler, Nicole & Liebert, Vanessa, 2014. "Joint impact of competition, ownership form and economic regulation on airport performance and pricing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 64(C), pages 92-109.
    13. Carlos Pestana Barros & Shunsuke Managi & Yuichiro Yoshida, 2010. "Technical Efficiency, Regulation And Heterogeneity In Japanese Airports," Pacific Economic Review, Wiley Blackwell, vol. 15(5), pages 685-696, December.
    14. Xiao, Yibin & Fu, Xiaowen & Zhang, Anming, 2013. "Demand uncertainty and airport capacity choice," Transportation Research Part B: Methodological, Elsevier, vol. 57(C), pages 91-104.
    15. repec:aeg:report:2014-4 is not listed on IDEAS
    16. Czerny, Achim I. & Shi, Zijun & Zhang, Anming, 2016. "Can market power be controlled by regulation of core prices alone? An empirical analysis of airport demand and car rental price," Transportation Research Part A: Policy and Practice, Elsevier, vol. 91(C), pages 260-272.
    17. Achim I. Czerny & Anmin Zhang, 2015. "Single-Till versus Dual-Till Regulation of Airports," Tinbergen Institute Discussion Papers 15-049/VIII, Tinbergen Institute.
    18. Volodymyr Bilotkach & Joseph Clougherty & Juergen Mueller & Anming Zhang, 2012. "Regulation, privatization, and airport charges: panel data evidence from European airports," Journal of Regulatory Economics, Springer, vol. 42(1), pages 73-94, August.
    19. Zhang, Anming & Zhang, Yimin, 2010. "Airport capacity and congestion pricing with both aeronautical and commercial operations," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 404-413, March.
    20. Wan, Xi & Zou, Benteng, 2024. "Multi-product airport competition and optimal airport charges," Research in Transportation Economics, Elsevier, vol. 103(C).
    21. Xi Wan & Benteng Zou, 2020. "Airport Competition in Two-sided Markets," DEM Discussion Paper Series 20-01, Department of Economics at the University of Luxembourg.

    More about this item

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy

    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:ebl:ecbull:eb-08l50001. 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: John P. Conley (email available below). General contact details of provider: .

    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.