Price vs. quantity-based approaches to airport congestion management

This paper analyzes price and quantity-based approaches to management of airport congestion, using a model where airlines are asymmetric and internalize congestion. Under these circumstances, optimal congestion tolls are differentiated across carriers, and a uniformity requirement on airport charges...

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Bibliographic Details
Published inJournal of public economics Vol. 93; no. 5; pp. 681 - 690
Main Author Brueckner, Jan K.
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.06.2009
Elsevier
SeriesJournal of Public Economics
Subjects
Air transport
Airport congestion
Airport congestion Slot Externality
Airports
Allocative efficiency
Congestion
Externalities
Externality
Management
Pricing
Slot
Airport congestion
Externality
Slot
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Summary:This paper analyzes price and quantity-based approaches to management of airport congestion, using a model where airlines are asymmetric and internalize congestion. Under these circumstances, optimal congestion tolls are differentiated across carriers, and a uniformity requirement on airport charges (as occurs when slots are sold or tolls are uniform) distorts carrier flight choices. Flight volumes tend to be too low for large carriers and too high for small carriers. But quantity-based regimes, where the airport authority allocates a fixed number of slots via free distribution or an auction, lead carriers to treat total flight volume (and thus congestion) as fixed, and this difference generates an efficient outcome as long as the number of slots is optimally chosen.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0047-2727
1879-2316
DOI:10.1016/j.jpubeco.2009.02.009