When to regulate airports: A simple rule
AbstractLanding fees at airports are regulated almost all over the world since airports are assumed to abuse their market power. We find that monopolistic airports have an incentive to restrain landing fees when they generate additional non-aviation revenues and that the optimal landing fee decreases in the degree of complementarity of aviation and non-aviation. Furthermore, we show that monopolistic airports will not have an incentive to abuse their market power anymore so that a price regulation becomes inappropriate as soon as non-aviation revenues increase above 50% of all airport revenues. --
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Bibliographic InfoPaper provided by Technische Universität Braunschweig, Economics Department in its series Economics Department Working Paper Series with number 6.
Date of creation: 2009
Date of revision:
airport regulation; aviation and non-aviation revenues; complementarity of aviation and non-aviation; locational rents;
Find related papers by JEL classification:
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gürtler, Marc & Sieg, Gernot, 2006.
"Crunch time: The optimal policy to avoid the "Announcement Effect" when terminating a subsidy,"
FW24V2, Technische Universität Braunschweig, Institute of Finance.
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"Grandfather rights in the market for airport slots,"
Economics Department Working Paper Series
4, Technische Universität Braunschweig, Economics Department.
- Sieg, Gernot, 2010. "Grandfather rights in the market for airport slots," Transportation Research Part B: Methodological, Elsevier, vol. 44(1), pages 29-37, January.
- Sieg, Gernot & Stegemann, Ulrike, 2009. "Strategic debt management within the stability and growth pact," Economics Department Working Paper Series 5, Technische Universität Braunschweig, Economics Department.
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