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Internalization of airport congestion

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  • Brueckner, Jan K

Abstract

This paper analyzes the internalization of airport congestion by nonatomistic carriers. It is shown that, in allocating traffic between the peak and off-peak periods, a monopolist fully accounts for the effect of congestion on passenger time costs, while also taking account of its impact on his own operating costs. The analysis thus suggests no role for congestion pricing under monopoly conditions. In an oligopoly setting, carriers are shown to internalize only the congestion they impose on themselves. A congestion toll that captures the uninternalized portion of external costs can then improve the allocation of traffic

Suggested Citation

  • Brueckner, Jan K, 2002. "Internalization of airport congestion," Journal of Air Transport Management, Elsevier, vol. 8(3), pages 141-147.
    • Handle: RePEc:eee:jaitra:v:8:y:2002:i:3:p:141-147
    DOI: 10.1016/S0969-6997(01)00049-7
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    References listed on IDEAS

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    1. Levine, Michael E, 1969. "Landing Fees and the Airport Congestion Problem," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 79-108, April.
    2. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
    3. Steven A. Morrison & Clifford Winston, 1989. "Enhancing the Performance of the Deregulated Air Transportation System," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1989 Micr), pages 61-123.
    4. Carlin, Alan & Park, Rolla Edward, 1970. "Marginal Cost Pricing of Airport Runway Capacity," American Economic Review, American Economic Association, vol. 60(3), pages 310-319, June.
    5. Daniel, Joseph I. & Pahwa, Munish, 2000. "Comparison of Three Empirical Models of Airport Congestion Pricing," Journal of Urban Economics, Elsevier, vol. 47(1), pages 1-38, January.
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