IDEAS home Printed from https://ideas.repec.org/p/frz/wpaper/wp2022_18.rdf.html
   My bibliography  Save this paper

Are Deregulated Airports More Efficient?

Author

Listed:
  • Pierre M. Picard
  • Alessandro Tampieri
  • Xi Wan

Abstract

Picard et al. (2019) show that allocative inefficiency may occur in a private airport when passenger fees are regulated. In this paper, we investigate the presence of inefficiency in slot allocation when an airport faces no regulation over per-passenger charges. In the model, passengers favor peak times and the number of available peak-time slots is constrained by airport capacities. Consistent with empirical evidence, we find that fees deregulation solves allocative inefficiency by raising per-passenger fees. However, when the infrastructural resources appear to be more efficiently employed, the increase in fees leads to a fall in social welfare.

Suggested Citation

  • Pierre M. Picard & Alessandro Tampieri & Xi Wan, 2022. "Are Deregulated Airports More Efficient?," Working Papers - Economics wp2022_18.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2022_18.rdf
    as

    Download full text from publisher

    File URL: https://www.disei.unifi.it/upload/sub/pubblicazioni/repec/pdf/wp18_2022.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Verhoef, Erik T., 2010. "Congestion pricing, slot sales and slot trading in aviation," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 320-329, March.
    2. Picard, P.M. & Tampieri, A. & Wan, Xi, 2019. "Airport capacity and inefficiency in slot allocation," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 330-357.
    3. Basso, Leonardo J. & Zhang, Anming, 2010. "Pricing vs. slot policies when airport profits matter," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 381-391, March.
    4. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
    5. Barbot, Cristina, 2004. "Economic effects of re-allocating airports slots: a vertical differentiation approach," Journal of Air Transport Management, Elsevier, vol. 10(5), pages 333-343.
    6. 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.
    7. Czerny, Achim I. & Cowan, Simon & Zhang, Anming, 2017. "How to mix per-flight and per-passenger based airport charges: The oligopoly case," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 483-500.
    8. Lin, Ming Hsin & Zhang, Yimin, 2017. "Hub-airport congestion pricing and capacity investment," Transportation Research Part B: Methodological, Elsevier, vol. 101(C), pages 89-106.
    9. Athanasios Katsaros & Voula Psaraki, 2012. "Slot misuse phenomena in capacity-constrained airports with seasonal demand: the Greek experience," Transportation Planning and Technology, Taylor & Francis Journals, vol. 35(8), pages 790-806, June.
    10. Brueckner, Jan K., 2009. "Price vs. quantity-based approaches to airport congestion management," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 681-690, June.
    11. Martín, Juan Carlos & Pilar Socorro, M., 2009. "A new era for airport regulators through capacity investments," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(6), pages 618-625, July.
    12. Czerny, Achim I., 2013. "Public versus private airport behavior when concession revenues exist," Economics of Transportation, Elsevier, vol. 2(1), pages 38-46.
    Full references (including those not matched with items on IDEAS)

    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. Pierre Picard & Alessandro Tampieri & Xi Wan, 2023. "Deregulation and Efficiency in Slot-Constrained Airports," DEM Discussion Paper Series 23-14, Department of Economics at the University of Luxembourg.
    2. Picard, P.M. & Tampieri, A. & Wan, Xi, 2019. "Airport capacity and inefficiency in slot allocation," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 330-357.
    3. Sheng, Dian & Li, Zhi-Chun & Xiao, Yi-bin & Fu, Xiaowen, 2015. "Slot auction in an airport network with demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 82(C), pages 79-100.
    4. Dixit, Aasheesh & Jakhar, Suresh Kumar, 2021. "Airport capacity management: A review and bibliometric analysis," Journal of Air Transport Management, Elsevier, vol. 91(C).
    5. 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.
    6. Lin, Ming Hsin, 2022. "Pricing regime choices for international airports: A rationale for the non-discrimination principle," Economics of Transportation, Elsevier, vol. 31(C).
    7. Fu, Xiaowen & Lei, Zheng & Liu, Shaoxuan & Wang, Kun & Yan, Jia, 2020. "On-time performance policy in the Chinese aviation market - An innovation or disruption?," Transport Policy, Elsevier, vol. 95(C), pages 14-23.
    8. Aravena, Olivia & Basso, Leonardo J. & Figueroa, Nicolás, 2019. "Effects of asymmetric information on airport congestion management mechanisms," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 4-27.
    9. Sheng, Dian & Li, Zhi-Chun & Fu, Xiaowen, 2019. "Modeling the effects of airline slot hoarding behavior under the grandfather rights with use-it-or-lose-it rule," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 48-61.
    10. Zhang, Anming & Czerny, Achim I., 2012. "Airports and airlines economics and policy: An interpretive review of recent research," Economics of Transportation, Elsevier, vol. 1(1), pages 15-34.
    11. Hangjun Yang & Anming Zhang, 2011. "Price-cap regulation of congested airports," Journal of Regulatory Economics, Springer, vol. 39(3), pages 293-312, June.
    12. Fukui, Hideki, 2019. "How do slot restrictions affect airfares? New evidence from the US airline industry," Economics of Transportation, Elsevier, vol. 17(C), pages 51-71.
    13. Ribeiro, Nuno Antunes & Jacquillat, Alexandre & Antunes, António Pais & Odoni, Amedeo R. & Pita, João P., 2018. "An optimization approach for airport slot allocation under IATA guidelines," Transportation Research Part B: Methodological, Elsevier, vol. 112(C), pages 132-156.
    14. Noto, Claudio, 2020. "Airport slots, secondary trading, and congestion pricing at an airport with a dominant network airline," Research in Transportation Economics, Elsevier, vol. 79(C).
    15. Lin, Ming Hsin, 2021. "Airport pricing and capacity: Schedule versus congestion delays," Research in Transportation Economics, Elsevier, vol. 90(C).
    16. Zheng, Shiyuan & Wang, Kun & Chan, Felix T.S. & Fu, Xiaowen & Li, Zhi-Chun, 2022. "Subsidy on transport adaptation investment-modeling decisions under incomplete information and ambiguity," Transportation Research Part B: Methodological, Elsevier, vol. 162(C), pages 103-129.
    17. 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.
    18. Till Kösters & Marlena Meier & Gernot Sieg, 2023. "Effects of the use-it-or-lose-it rule on airline strategy and climate," Working Papers 36, Institute of Transport Economics, University of Muenster.
    19. Pellegrini, Paola & Bolić, Tatjana & Castelli, Lorenzo & Pesenti, Raffaele, 2017. "SOSTA: An effective model for the Simultaneous Optimisation of airport SloT Allocation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 99(C), pages 34-53.
    20. Achim I. Czerny & Anmin Zhang, 2015. "Single-Till versus Dual-Till Regulation of Airports," Tinbergen Institute Discussion Papers 15-049/VIII, Tinbergen Institute.

    More about this item

    Keywords

    Slot allocation; Endogenous fee; Airport capacity;
    All these keywords.

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:frz:wpaper:wp2022_18.rdf. 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: Giorgio Ricchiuti (email available below). General contact details of provider: https://edirc.repec.org/data/defirit.html .

    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.