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Spatial competition for passengers and its influence on efficiency of European airports

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  • Pavlyuk, Dmitry

Abstract

This study deals with estimation of European airports' efficiency values and their interrelation with a level of competition pressure for passengers among airports. In this paper we present a new adaptive definition of airport's catchment area. Using this definition we develop an indicator of a level of competition pressure, based on overlapping of airport's potential catchment areas. We apply a stochastic frontier model to estimate efficiencies of airports. The method includes the construction of a production frontier for a sample of airports and estimation of individual airports' efficiency values as distances from this frontier. We use a classic production approach to airport activities, where an airport enterprise uses labour resources (a number of employees) and infrastructure (a number of runways, gates, check-ins and parking spaces) for transportation of passengers. Also we use a re-sampling jack-knife technique to test the reliability of airports' efficiencies estimates. We investigate a relationship between a level of competition pressure and airports' operation efficiencies in case of imperfect spatial competition for passengers.

Suggested Citation

  • Pavlyuk, Dmitry, 2009. "Spatial competition for passengers and its influence on efficiency of European airports," MPRA Paper 16930, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:16930
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    References listed on IDEAS

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    1. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    2. Rui Cunha Marques & Carlos Pestana Barros, 2011. "Performance of European airports: regulation, ownership and managerial efficiency," Applied Economics Letters, Taylor & Francis Journals, vol. 18(1), pages 29-37.
    3. Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2003. "Access to and competition between airports: a case study for the San Francisco Bay area," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(1), pages 71-83, January.
    4. Kumbhakar,Subal C. & Lovell,C. A. Knox, 2003. "Stochastic Frontier Analysis," Cambridge Books, Cambridge University Press, number 9780521666633, January.
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    More about this item

    Keywords

    stochastic frontier; efficiency; airport; spatial competition;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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