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Consumer surplus analysis of selected long-haul air transport routes connecting Germany with California and China

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  • Klophaus, Richard
  • Grosche, Tobias

Abstract

Measuring the impact of air transport on economic welfare is relevant for many policy decisions but also subject to controversial discussions among researchers. We propose the use of price elasticity estimates together with empirical data on passenger volumes and fare levels to derive air travel demand functions. The demand functions then allow a measurement of consumer surplus of passengers as a key economic benefit of air transport. More specifically, by using segment-specific market data on passenger volumes, fare levels and aggregated own-price elasticities, we calculate revenues and consumer surplus associated with directional nonstop origin-destination traffic on selected long-haul routes from and to Germany's largest airport Frankfurt.

Suggested Citation

  • Klophaus, Richard & Grosche, Tobias, 2020. "Consumer surplus analysis of selected long-haul air transport routes connecting Germany with California and China," Research in Transportation Economics, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:retrec:v:80:y:2020:i:c:s0739885919303129
    DOI: 10.1016/j.retrec.2019.100793
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    More about this item

    Keywords

    Air transport; Wider economic benefits; Consumer surplus analysis;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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