IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v146y2021icp1-13.html
   My bibliography  Save this article

Aviation tax and railway subsidy: An integrated policy

Author

Listed:
  • Jiang, Changmin

Abstract

In this paper, we build a simple model to investigate the impacts of using aviation tax to subsidize high-speed rail (HSR). We find that when the HSR subsidy is not directly linked to the aviation tax, introducing this subsidy will decrease the air traffic and increase the rail traffic on the route where air transport and HSR compete. However, if part of the aviation tax revenue is earmarked for the HSR subsidy (i.e., the integrated tax-subsidy policy), the traffic implications of the HSR subsidy will be the opposite. To extend the analysis to a transportation network, when the integrated tax-subsidy policy only involves aviation tax revenue from routes with HSR presence, it will decrease air traffic on routes without HSR. When the integrated tax-subsidy scheme involves tax revenue from the whole network, the traffic implications depend on the comparison between aviation tax rate on routes with and without HSR.

Suggested Citation

  • Jiang, Changmin, 2021. "Aviation tax and railway subsidy: An integrated policy," Transportation Research Part B: Methodological, Elsevier, vol. 146(C), pages 1-13.
    • Handle: RePEc:eee:transb:v:146:y:2021:i:c:p:1-13
    DOI: 10.1016/j.trb.2021.01.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191261521000230
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.trb.2021.01.013?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Takebayashi, Mikio, 2015. "Multiple hub network and high-speed railway: Connectivity, gateway, and airport leakage," Transportation Research Part A: Policy and Practice, Elsevier, vol. 79(C), pages 55-64.
    2. Dobruszkes, Frédéric & Dehon, Catherine & Givoni, Moshe, 2014. "Does European high-speed rail affect the current level of air services? An EU-wide analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 461-475.
    3. Wan, Yulai & Ha, Hun-Koo & Yoshida, Yuichiro & Zhang, Anming, 2016. "Airlines’ reaction to high-speed rail entries: Empirical study of the Northeast Asian market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 532-557.
    4. Li, Xiaoyu & Jiang, Changmin & Wang, Kun & Ma, Jun, 2018. "Determinants of partnership levels in air-rail cooperation," Journal of Air Transport Management, Elsevier, vol. 71(C), pages 88-96.
    5. Mayor, Karen & Tol, Richard S.J., 2007. "The impact of the UK aviation tax on carbon dioxide emissions and visitor numbers," Transport Policy, Elsevier, vol. 14(6), pages 507-513, November.
    6. Zhang, Anming & Wan, Yulai & Yang, Hangjun, 2019. "Impacts of high-speed rail on airlines, airports and regional economies: A survey of recent research," Transport Policy, Elsevier, vol. 81(C), pages 1-19.
    7. Jiang, Changmin & Zhang, Anming, 2014. "Effects of high-speed rail and airline cooperation under hub airport capacity constraint," Transportation Research Part B: Methodological, Elsevier, vol. 60(C), pages 33-49.
    8. Skolrud, Tristan D. & Galinato, Gregmar I., 2017. "Welfare implications of the renewable fuel standard with an integrated tax-subsidy policy," Energy Economics, Elsevier, vol. 62(C), pages 291-301.
    9. Adler, Nicole & Pels, Eric & Nash, Chris, 2010. "High-speed rail and air transport competition: Game engineering as tool for cost-benefit analysis," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 812-833, August.
    10. Lu, Chuanyi & Tong, Qing & Liu, Xuemei, 2010. "The impacts of carbon tax and complementary policies on Chinese economy," Energy Policy, Elsevier, vol. 38(11), pages 7278-7285, November.
    11. D’Alfonso, Tiziana & Jiang, Changmin & Bracaglia, Valentina, 2016. "Air transport and high-speed rail competition: Environmental implications and mitigation strategies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 261-276.
    12. Yang, Hangjun & Zhang, Anming, 2012. "Effects of high-speed rail and air transport competition on prices, profits and welfare," Transportation Research Part B: Methodological, Elsevier, vol. 46(10), pages 1322-1333.
    13. Takebayashi, Mikio, 2016. "How could the collaboration between airport and high speed rail affect the market?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 277-286.
    14. Galinato, Gregmar I. & Yoder, Jonathan K., 2010. "An integrated tax-subsidy policy for carbon emission reduction," Resource and Energy Economics, Elsevier, vol. 32(3), pages 310-326, August.
    15. Brueckner, Jan K. & Zhang, Anming, 2010. "Airline emission charges: Effects on airfares, service quality, and aircraft design," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 960-971, September.
    16. Abolhosseini, Shahrouz & Heshmati, Almas, 2014. "The main support mechanisms to finance renewable energy development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 876-885.
    17. Jiang, Changmin & Zhang, Anming, 2016. "Airline network choice and market coverage under high-speed rail competition," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 248-260.
    18. Martin, Elliot PhD & Shaheen, Susan PhD & Lipman, Timothy & Camel, Madonna, 2014. "Evaluating the Public Perception of a Feebate Policy in California through the Estimation and Cross-Validation of an Ordinal Regression Model," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt9zk5b5z6, Institute of Transportation Studies, UC Berkeley.
    19. González, Rodrigo & Hosoda, Eiji B., 2016. "Environmental impact of aircraft emissions and aviation fuel tax in Japan," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 234-240.
    20. Sam Meng & Mahinda Siriwardana & Judith McNeill, 2013. "The Environmental and Economic Impact of the Carbon Tax in Australia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(3), pages 313-332, March.
    21. C Norman & R Vickerman, 1999. "Local and Regional Implications of Trans-European Transport Networks: The Channel Tunnel Rail Link," Environment and Planning A, , vol. 31(4), pages 705-718, April.
    22. Ma, Wenliang & Wang, Qiang & Yang, Hangjun & Zhang, Anming & Zhang, Yahua, 2019. "Effects of Beijing-Shanghai high-speed rail on air travel: Passenger types, airline groups and tacit collusion," Research in Transportation Economics, Elsevier, vol. 74(C), pages 64-76.
    23. Fu, Xiaowen & Zhang, Anming & Lei, Zheng, 2012. "Will China’s airline industry survive the entry of high-speed rail?," Research in Transportation Economics, Elsevier, vol. 35(1), pages 13-25.
    24. Greene, David L. & Patterson, Philip D. & Singh, Margaret & Li, Jia, 2005. "Feebates, rebates and gas-guzzler taxes: a study of incentives for increased fuel economy," Energy Policy, Elsevier, vol. 33(6), pages 757-775, April.
    25. Socorro, M. Pilar & Viecens, M. Fernanda, 2013. "The effects of airline and high speed train integration," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 160-177.
    26. Xia, Wenyi & Jiang, Changmin & Wang, Kun & Zhang, Anming, 2019. "Air-rail revenue sharing in a multi-airport system: Effects on traffic and social welfare," Transportation Research Part B: Methodological, Elsevier, vol. 121(C), pages 304-319.
    27. Greene, David L. & Patterson, Philip D. & Singh, Margaret & Li, Jia, 2005. "Corrigendum to "Feebates, rebates and gas-guzzler taxes: a study of incentives for increased fuel economy" [Energy Policy 33 (2005) 757-775]," Energy Policy, Elsevier, vol. 33(14), pages 1901-1902, September.
    28. Liu, Shuli & Wan, Yulai & Ha, Hun-Koo & Yoshida, Yuichiro & Zhang, Anming, 2019. "Impact of high-speed rail network development on airport traffic and traffic distribution: Evidence from China and Japan," Transportation Research Part A: Policy and Practice, Elsevier, vol. 127(C), pages 115-135.
    29. Martin, Elliot & Shaheen, Susan & Lipman, Timothy & Camel, Madonna, 2014. "Evaluating the public perception of a feebate policy in California through the estimation and cross-validation of an ordinal regression model," Transport Policy, Elsevier, vol. 33(C), pages 144-153.
    30. Jiang, Changmin & D'Alfonso, Tiziana & Wan, Yulai, 2017. "Air-rail cooperation: Partnership level, market structure and welfare implications," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 461-482.
    31. Takebayashi, Mikio, 2018. "Managing airport charges under the multiple hub network with high speed rail: Considering capacity and gateway function," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 108-123.
    32. D’Alfonso, Tiziana & Jiang, Changmin & Bracaglia, Valentina, 2015. "Would competition between air transport and high-speed rail benefit environment and social welfare?," Transportation Research Part B: Methodological, Elsevier, vol. 74(C), pages 118-137.
    33. Behrens, Christiaan & Pels, Eric, 2012. "Intermodal competition in the London–Paris passenger market: High-Speed Rail and air transport," Journal of Urban Economics, Elsevier, vol. 71(3), pages 278-288.
    34. Timilsina, Govinda R. & Csordás, Stefan & Mevel, Simon, 2011. "When does a carbon tax on fossil fuels stimulate biofuels?," Ecological Economics, Elsevier, vol. 70(12), pages 2400-2415.
    35. Hu, Rong & Xiao, Yi-bin & Jiang, Changmin, 2018. "Jet fuel hedging, operational fuel efficiency improvement and carbon tax," Transportation Research Part B: Methodological, Elsevier, vol. 116(C), pages 103-123.
    36. Theodore Tsekeris, 2011. "Public Expenditure Competition in the Transport Sector: Intermodal and Spatial Considerations for Greece," Environment and Planning A, , vol. 43(8), pages 1981-1998, August.
    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. Jiang, Changmin & Yang, Hangjun, 2021. "Carbon tax or sustainable aviation fuel quota," Energy Economics, Elsevier, vol. 103(C).
    2. Xu, Haonan & Liu, Jiaguo & Qi, Siwen, 2024. "Incentive policy for rail-water multimodal transport: Subsidizing price or constructing dry port?," Transport Policy, Elsevier, vol. 150(C), pages 219-243.
    3. Taolei Guo & Junjie Chen & Pei Liu, 2022. "Impact of Emerging Transport Technologies on Freight Economic and Environmental Performance: A System Dynamics View," IJERPH, MDPI, vol. 19(22), pages 1-17, November.
    4. Wang, Chunan & Jiang, Changmin, 2022. "How do pandemics affect intercity air travel? Implications for traffic and environment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 330-353.

    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. Jiang, Mei & Jiang, Changmin & Xiao, Yi-bin & Wang, Chunan, 2021. "Air-HSR cooperation: Impacts on service frequency and environment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 150(C).
    2. Zhang, Anming & Wan, Yulai & Yang, Hangjun, 2019. "Impacts of high-speed rail on airlines, airports and regional economies: A survey of recent research," Transport Policy, Elsevier, vol. 81(C), pages 1-19.
    3. Wang, Wei & Sun, Huijun & Wu, Jianjun, 2020. "How does the decision of high-speed rail operator affect social welfare? Considering competition between high-speed rail and air transport," Transport Policy, Elsevier, vol. 88(C), pages 1-15.
    4. Li, Zhi-Chun & Tu, Ningwen & Fu, Xiaowen & Sheng, Dian, 2022. "Modeling the effects of airline and high-speed rail cooperation on multi-airport systems: The implications on congestion, competition and social welfare," Transportation Research Part B: Methodological, Elsevier, vol. 155(C), pages 448-478.
    5. Zhu, Feng & Wu, Xu & Cao, Chengxuan, 2021. "High-speed rail and air transport competition under high flight delay conditions in China: A case study of the Beijing-Shanghai corridor," Utilities Policy, Elsevier, vol. 71(C).
    6. Takebayashi, Mikio, 2021. "Workability of a multiple-gateway airport system with a high-speed rail network," Transport Policy, Elsevier, vol. 107(C), pages 61-71.
    7. Takebayashi, Mikio & Yamaguchi, Hiromichi, 2022. "Managing a multiple-gateway airport system with super high-speed rail," Journal of Air Transport Management, Elsevier, vol. 99(C).
    8. Xia, Wenyi & Jiang, Changmin & Wang, Kun & Zhang, Anming, 2019. "Air-rail revenue sharing in a multi-airport system: Effects on traffic and social welfare," Transportation Research Part B: Methodological, Elsevier, vol. 121(C), pages 304-319.
    9. Cai, Dong-ling & Xiao, Yi-bin & Jiang, Changmin, 2021. "Competition between high-speed rail and airlines: Considering both passenger and cargo," Transport Policy, Elsevier, vol. 110(C), pages 379-393.
    10. Su, Min & Luan, Weixin & Fu, Xiaowen & Yang, Zaili & Zhang, Rui, 2020. "The competition effects of low-cost carriers and high-speed rail on the Chinese aviation market," Transport Policy, Elsevier, vol. 95(C), pages 37-46.
    11. Wang, Chunan & Jiang, Changmin & Zhang, Anming, 2021. "Effects of Airline Entry on High-Speed Rail," Transportation Research Part B: Methodological, Elsevier, vol. 154(C), pages 242-265.
    12. Jiang, Changmin & Wang, Chunan, 2021. "High-speed rail pricing: Implications for social welfare," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    13. Gu, Hongyi & Wan, Yulai, 2020. "Can entry of high-speed rail increase air traffic? Price competition, travel time difference and catchment expansion," Transport Policy, Elsevier, vol. 97(C), pages 55-72.
    14. Jiang, Changmin & Wang, Kun & Wang, Qiang & Yang, Hangjun, 2022. "The Impact of High-Speed Rail Competition on Airline On-Time Performance," Transportation Research Part B: Methodological, Elsevier, vol. 161(C), pages 109-127.
    15. Asep Yayat Nurhidayat & Hera Widyastuti & Sutikno & Dwi Phalita Upahita, 2023. "Research on Passengers’ Preferences and Impact of High-Speed Rail on Air Transport Demand," Sustainability, MDPI, vol. 15(4), pages 1-26, February.
    16. Álvarez-SanJaime, Óscar & Cantos-Sanchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2020. "Pricing and infrastructure fees in shaping cooperation in a model of high-speed rail and airline competition," Transportation Research Part B: Methodological, Elsevier, vol. 140(C), pages 22-41.
    17. Avogadro, Nicolò & Pels, Eric & Redondi, Renato, 2023. "Policy impacts on the propensity to travel by HSR in the Amsterdam – London market," Socio-Economic Planning Sciences, Elsevier, vol. 87(PB).
    18. Jiang, Changmin & D'Alfonso, Tiziana & Wan, Yulai, 2017. "Air-rail cooperation: Partnership level, market structure and welfare implications," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 461-482.
    19. Wang, Yixiao & Sun, Luoyi & Teunter, Ruud H. & Wu, Jianhong & Hua, Guowei, 2020. "Effects of introducing low-cost high-speed rail on air-rail competition: Modelling and numerical analysis for Paris-Marseille," Transport Policy, Elsevier, vol. 99(C), pages 145-162.
    20. Wang, Yixiao & Pels, Eric & Teunter, Ruud H. & Sun, Luoyi & Wu, Jianhong, 2023. "Railway liberalization, airport congestion toll, and infrastructure pricing: Modelling and numerical analysis for European and Chinese markets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 170(C).

    More about this item

    Keywords

    Tax; Subsidy; Airline; Railway;
    All these keywords.

    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:eee:transb:v:146:y:2021:i:c:p:1-13. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description .

    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.