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Passenger facility charge vs. airport improvement program funds: A dynamic network DEA analysis for U.S. airport financing

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  • Chang, Young-Tae
  • (Kevin) Park, Hyosoo
  • Zou, Bo
  • Kafle, Nabin

Abstract

Passenger Facility Charge (PFC) and the Airport Improvement Program (AIP) are two major sources to finance U.S. airports. This paper develops a novel dynamic network DEA framework to investigate the substitutability between PFC and AIP funds. We find that the studied U.S. airports can substitute PFC for 8–35% of the current AIP funds and contribute significantly to the proposed plan of the US congress to cut AIP funding. In addition, the amount of PFC-for-AIP funds substitution negatively correlates with the productive efficiency of airports. The findings send an important message for future policy reforms on U.S. airport financing.

Suggested Citation

  • Chang, Young-Tae & (Kevin) Park, Hyosoo & Zou, Bo & Kafle, Nabin, 2016. "Passenger facility charge vs. airport improvement program funds: A dynamic network DEA analysis for U.S. airport financing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 88(C), pages 76-93.
    • Handle: RePEc:eee:transe:v:88:y:2016:i:c:p:76-93
    DOI: 10.1016/j.tre.2016.02.001
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