Alternative Forms of Economic Regulation and their Efficiency Implications for Airports

By Tae Hoon Oum, Anming Zhang, Yimin Zhang. Journal of Transport Economics and Policy, 2004

218 citations recorded by the source corpus.

This paper investigates the effects of different forms of price regulation on airport efficiency. Our investigation takes into account the interaction between concession profits and price regulations. Our results show that while ROR regulation may lead to over-investment in capacity, price-cap regulation is prone to under-investment. The extent of the under-investment is found to be less under the dual-till price cap than under the single-till price cap. Our empirical investigation of capital input productivity and total factor productivity confirm the analytical findings. In particular, the total factor productivity is greater under the dual-till price cap than under either the single-till price cap or single-till ROR. Our analysis appears to support the argument made by several economists that dual-till regulation would be better than the single-till regulation in terms of economic efficiency, especially for large and busy airports.

Subfields: Aerospace Engineering, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/ccf0d454c054df3ba0398a3da9b9e39b171d0c5d

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Citations in the corpus

Measuring the economic efficiency of airports: A Simar–Wilson methodology analysis (2008, background): “Efficiency has been the focus of much research in the recent past (Fung et al., 2008; Oum et al., 2004; Pels et al., 2001, 2003; Yoshida, 2004; Yoshida and Fujimoto, 2004).”
Airport capacity and congestion when carriers have market power (2006, unknown): “(For recent studies on airport privatization and regulation/deregulation, see, for example, Forsyth, 1997, 2002a, 2002b; Beesley, 1999; Starkie and Yarrow, 2000; Kunz and Niemeier, 2000; Starkie, 2001; Gillen and Morrison, 2001; Tretheway, 2001; Graham, 2002; Hooper, 2002; Niemeier, 2002; Zhang and ”
Joint impact of competition, ownership form and economic regulation on airport performance and pricing (2014, background): “Parker (1999) estimates the technical efficiency of the BAA airports pre- and post-privatization.”
Airport Deregulation: Effects on Pricing and Capacity (2008, methodology): “In Zhang and Zhang (1997) and Oum et al. (2004), the demand for the airport,Q, is assumed to be dependent on a full price ρ, which includes flight delay costs and the airport charge.”
REVENUE SHARING WITH MULTIPLE AIRLINES AND AIRPORTS (2010, methodology): “8 This formulation of concession surplus has been used in, e.g. Zhang and Zhang (1997, 2003), Oum et al. (2004) and Fu and The 9th International Conference on Electronic Business, Macau, November 30 - December 4, 2009 between the airport and airlines is modeled as a two-stage game.”
Privatization, corporatization, ownership forms and their effects on the performance of the world's major airports (2006, background): “Despite the diversity of airport ownership structures and management arrangements, the aforementioned studies with the exception of Parker (1999)(6), have largely ignored the effects of institutional factors on airports’ productivity and efficiency.”