Airline Emission Charges: Effects on Airfares, Service Quality, and Aircraft Design
AbstractThis paper explores the effect of airline emissions charges on airfares, airline service quality, aircraft design features, and network structure, using a detailed and realistic theoretical model of competing duopoly airlines. These impacts are derived by analyzing the effects of an increase in the effective price of fuel, which is the path by which emissions charges will alter airline choices. The results show that emission charges will raise fares, reduce flight frequency, increase load factors, and raise aircraft fuel efficiency, while having no effect on aircraft size. Given that these adjustments occur in response to the treatment of an emissions externality that is currently unaddressed, they represent efficient changes that move society closer to a social optimum.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2547.
Date of creation: 2009
Date of revision:
Other versions of this item:
- Brueckner, Jan K. & Zhang, Anming, 2010. "Airline emission charges: Effects on airfares, service quality, and aircraft design," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 960-971, September.
- Jan K. Brueckner & Anming Zhang, 2009. "Airline Emission Charges: Effects on Airfares, Service Quality, and Aircraft Design," Working Papers 080916, University of California-Irvine, Department of Economics.
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
- Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
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