Estimating the marginal costs of airport operation by using multivariate time series model with correlated error terms
AbstractThe research presented in this paper was motivated by the central role of infrastructure charing in European transport policy. It is dedicated to the question whether and to what extent marginal infrastructure costs of airports, e.g. the marginal costs of maintaining, renewing and operating airport infrastructure, play a significant role for charging. The analysis presented in this paper is based on hourly cost and traffic data for the airport of Helsinki. In contrast to the standard formulation of cost function analysis our research focuses on one factor input only, the labour cost which ist the dominant cost component for the case study airport. This factor input can safely assumed to be the most relevant category for analysing cost variability and deriving marginal costs. The analysis makes use of a multivariate time series approach with specific models for correlated error terms to account for random shocks such as delays. The major result ist for almost all airport service areas a linear relationship betwenn labour cost and aircraft movements with an average marginal cost of € 22.60. An exception is the relationship between the staff costs for passenger services and international departing flights where a cubic cost relationship was estimated. Our quantitative findings are comparable with earlier findings for U.S. airports.
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Bibliographic InfoPaper provided by Institute of Transport Economics, University of Muenster in its series Working Papers with number 11.
Length: 25 pages
Date of creation: Feb 2006
Date of revision:
Cost functions; time series analysis; airports; marginal costs; infrastructure charging;
Find related papers by JEL classification:
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-06 (All new papers)
- NEP-CSE-2006-05-06 (Economics of Strategic Management)
- NEP-EFF-2006-05-06 (Efficiency & Productivity)
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