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The Impacts of Airport Centrality in the EU Network and Inter- Airport Competition on Airport Efficiency

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  • Malighetti, G
  • Martini, G
  • Paleari, S
  • Redondi, R

Abstract

In this paper we study the relationship between airport efficiency and two factors: an airport’s centrality in the EU network, and the intensity of competition from alternative airports in the same catchment area. We apply a two-stage econometric model based on the Simar & Wilson (2007) bootstrap procedure to a balanced sample of 57 European airports. We also design and compute our own measures of airport centrality and competition. The results show that efficiency is positively related to centrality in the European network, as measured by a weighted sum of minimal paths passing through the airport in question. The intensity of competition between airports also has a positive effect on efficiency. Our analysis suggests that air transportation policies should focus on increasing competition within important catchment areas (e.g., by investing in infrastructure facilitating access to alternative airports) and enhancing the connectivity of the EU network (e.g., by subsidizing new point-to-point connections between airports with capacity to spare).

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17673.

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Date of creation: 10 Jan 2009
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Handle: RePEc:pra:mprapa:17673

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Keywords: air transportation; efficiency; network centrality; inter – airports competition.;

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  1. Oum, Tae H. & Yan, Jia & Yu, Chunyan, 2008. "Ownership forms matter for airport efficiency: A stochastic frontier investigation of worldwide airports," Journal of Urban Economics, Elsevier, vol. 64(2), pages 422-435, September.
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  6. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
  7. Barros, Carlos Pestana & Dieke, Peter U.C., 2008. "Measuring the economic efficiency of airports: A Simar-Wilson methodology analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 44(6), pages 1039-1051, November.
  8. Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2003. "Inefficiencies and scale economies of European airport operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 39(5), pages 341-361, September.
  9. Yoshida, Yuichiro, 2004. "Endogenous-weight TFP measurement: methodology and its application to Japanese-airport benchmarking," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 40(2), pages 151-182, March.
  10. Kneip, Alois & Park, Byeong U. & Simar, L opold, 1998. "A Note On The Convergence Of Nonparametric Dea Estimators For Production Efficiency Scores," Econometric Theory, Cambridge University Press, vol. 14(06), pages 783-793, December.
  11. Malcolm Abbott & Su Wu, 2002. "Total Factor Productivity and Efficiency of Australian Airports," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 244-260.
  12. Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2001. "Relative efficiency of European airports," Transport Policy, Elsevier, vol. 8(3), pages 183-192, July.
  13. Gillen, David & Lall, Ashish, 1997. "Developing measures of airport productivity and performance: an application of data envelopment analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 33(4), pages 261-273, December.
  14. Yoshida, Yuichiro & Fujimoto, Hiroyoshi, 2004. "Japanese-airport benchmarking with the DEA and endogenous-weight TFP methods: testing the criticism of overinvestment in Japanese regional airports," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 40(6), pages 533-546, November.
  15. Paolo Malighetti & Gianmaria Martini & Stefano Paleari & Renato Redondi, 2007. "An Empirical Investigation on the Efficiency, Capacity Ownership of Italian Airports," Rivista di Politica Economica, SIPI Spa, vol. 97(1), pages 157-188, January-F.
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