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Regulation, Privatization, and Airport Charges: Panel Data Evidence from European Airports

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  • Bilotkach, Volodymyr
  • Clougherty, Joseph A.
  • Mueller, Juergen
  • Zhang, Anming

Abstract

This paper examines the determinants of airport aeronautical charges by employing a unique panel dataset covering sixty-one European airports over an eighteen-year period. We are able to extend the literature on the role of airports as an essential element in transport infrastructure by offering the first analysis of the impact of different regulatory policies and privatization on airport charges in a panel data setting where fixed effects can be employed to mitigate endogeneity concerns. Our main empirical results indicate that aeronautical charges are lower at airports when single-till regulation is employed, when airports are privatized, and -- tentatively -- when ex-post price regulation is applied. Furthermore, hub airports generally set higher aeronautical charges, and it appears that price-cap regulation and the presence of nearby airports do not affect aeronautical charges.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8618.

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Date of creation: Oct 2011
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Handle: RePEc:cpr:ceprdp:8618

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Keywords: airport charges; airports; hubs; privatization; regulation; single-till;

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References

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  1. David Starkie, 2004. "Testing the regulatory model: the expansion of Stansted airport," Fiscal Studies, Institute for Fiscal Studies, vol. 25(4), pages 389-413, December.
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  10. Achim Czerny, 2006. "Price-cap Regulation of Airports: Single-till Versus Dual-till," Journal of Regulatory Economics, Springer, vol. 30(1), pages 85-97, 07.
  11. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  12. Zhang, Anming & Zhang, Yimin, 1997. "Concession revenue and optimal airport pricing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 33(4), pages 287-296, December.
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  15. Van Dender, Kurt, 2007. "Determinants of fares and operating revenues at US airports," Journal of Urban Economics, Elsevier, vol. 62(2), pages 317-336, September.
  16. Germá Bel & Xavier Fageda, 2009. "Factors Explaining Charges in European Airports: Competition, Market Size, Private Ownership and Regulation," Working Papers 2009-31, FEDEA.
  17. Leonardo J. Basso & Anming Zhang, 2008. "Sequential peak-load pricing: the case of airports and airlines," Canadian Journal of Economics, Canadian Economics Association, vol. 41(3), pages 1087-1119, August.
  18. David Starkie, 2008. "The Airport Industry in a Competitive Environment: A United Kingdom Perspective," OECD/ITF Joint Transport Research Centre Discussion Papers 2008/15, OECD Publishing.
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  20. Hangjun Yang & Anming Zhang, 2011. "Price-cap regulation of congested airports," Journal of Regulatory Economics, Springer, vol. 39(3), pages 293-312, June.
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Citations

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Cited by:
  1. Bilotkach, Volodymyr & Mueller, Juergen & Németh, Adél, 2014. "Estimating the consumer welfare effects of de-hubbing: The case of Malév Hungarian Airlines," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 66(C), pages 51-65.
  2. Xavier Fageda & Marta Gonzalez-Aregall, 2012. "“Regulation of Port Charges in Spain: Global versus Local Competition”," IREA Working Papers 201217, University of Barcelona, Research Institute of Applied Economics, revised Oct 2012.
  3. Allroggen, Florian & Malina, Robert & Lenz, Ann-Katrin, 2013. "Which factors impact on the presence of incentives for route and traffic development? Econometric evidence from European airports," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 60(C), pages 49-61.
  4. Clifford Winston, 2013. "On the Performance of the U.S. Transportation System: Caution Ahead," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 773-824, September.
  5. Hangjun Yang & Anming Zhang, 2011. "Price-cap regulation of congested airports," Journal of Regulatory Economics, Springer, vol. 39(3), pages 293-312, June.
  6. Benjamin Dachis, 2014. "Full Throttle: Reforming Canada's Aviation Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 398, January.
  7. Polk, Andreas & Bilotkach, Volodymyr, 2013. "The assessment of market power of hub airports," Transport Policy, Elsevier, vol. 29(C), pages 29-37.
  8. Marta Gonzalez-Aregall & Xavier Fageda, 2013. "Regulation of Port Charges in Spain: Global versus Local Competition," ERSA conference papers ersa13p581, European Regional Science Association.
  9. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy: Extended Version," MPRA Paper 37816, University Library of Munich, Germany.

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