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An Empirical Investigation on the Efficiency, Capacity and Ownership of Italian Airports

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  • Paolo Malighetti
  • Gianmaria Martini

    ()

  • Stefano Paleari
  • Renato Redondi

Abstract

In this paper we study the efficiency of Italian airports applying a DEA model to a sample of 34 airports. We consider two outputs: aircraft movements and passengers. We find that large airports are more efficient that domestic and regional ones, i.e. small airports have spare capacity since they are, on average, more distant from the VRS frontier than large airports. Moreover, the latter are operating under decreasing returns to scale while increasing returns to scale arise in the small ones. These findings imply that further investments to develop large airports will lead to higher average costs. The Tobit regression on the estimated DEA scores shows that efficiency is positively related with the so—called hub premium (i.e. an airline dominates an airport) and with privatization, and it is negatively affected by military activities and season effects. Hence we suggest that airport’s privatization, incentives to invest in large airports (which are close to saturation of their capacity) and development plans to improve the activities in domestic and regional airports may form the benchmarks of air transportation policy in Italy at least in the short—run.

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Bibliographic Info

Paper provided by Department of Economics and Technology Management, University of Bergamo in its series Working Papers with number 0703.

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Date of creation: 2007
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Handle: RePEc:brh:wpaper:0703

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Related research

Keywords: Airport efficiency; DEA analysis; privatization; capacity;

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Cited by:
  1. Suau-Sanchez, Pere & Burghouwt, Guillaume & Pallares-Barbera, Montserrat, 2014. "An appraisal of the CORINE land cover database in airport catchment area analysis using a GIS approach," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 12-16.
  2. Gitto, Simone & Mancuso, Paolo, 2010. "Airport efficiency: a DEA two stage analysis of the Italian commercial airports," MPRA Paper 34366, University Library of Munich, Germany, revised 10 Oct 2010.
  3. Tsui, Wai Hong Kan & Gilbey, Andrew & Balli, Hatice Ozer, 2014. "Estimating airport efficiency of New Zealand airports," Journal of Air Transport Management, Elsevier, vol. 35(C), pages 78-86.
  4. Tiziana D’Alfonso & Cinzia Daraio & Alberto Nastasi, 2013. "Assesing the Impact of Competition on the Efficiency of Italian Airports," DIAG Technical Reports 2013-01, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
  5. Roberto Colombi & Gianmaria Martini & Giorgio Vittadini, 2011. "A Stochastic Frontier Model with short-run and long-run inefficiency random effects," Working Papers 1101, Department of Economics and Technology Management, University of Bergamo.
  6. Gitto, Simone & Mancuso, Paolo, 2012. "Bootstrapping the Malmquist indexes for Italian airports," International Journal of Production Economics, Elsevier, vol. 135(1), pages 403-411.

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