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Cost–benefit analysis of investments in airport infrastructure:a practical approach

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  • Jorge, José-Doramas
  • de Rus, Ginés

Abstract

This paper presents a cost–benefit analysis approach devised to conduct project evaluation in conditions of limited analyst time, research budget and data availability. The emphasis is on discarding economically viable from unviable projects rather than on arriving at a precise estimate of project return. The paper starts by setting out the theoretical background for identifying and measuring project benefits. It then presents a practical approach to measure such benefits in projects involving the expansion of passenger capacity and, subsequently, those aimed at expanding aircraft capacity. Projects in the freight market and the estimation of airport costs are treated in turn. A practical application is included as an appendix.

Suggested Citation

  • Jorge, José-Doramas & de Rus, Ginés, 2004. "Cost–benefit analysis of investments in airport infrastructure:a practical approach," Journal of Air Transport Management, Elsevier, vol. 10(5), pages 311-326.
  • Handle: RePEc:eee:jaitra:v:10:y:2004:i:5:p:311-326 DOI: 10.1016/j.jairtraman.2004.05.001
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    References listed on IDEAS

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    1. Reynolds-Feighan, Aisling & Button, Kenneth J., 1999. "An Assessment of the Capacity and Congestion levels at European Airports," ERSA conference papers ersa99pa241, European Regional Science Association.
    2. Wenbin Wei & Mark Hansen, 2003. "Cost Economics of Aircraft Size," Journal of Transport Economics and Policy, University of Bath, vol. 37(2), pages 279-296, May.
    3. Douglas, George W & Miller, James C, III, 1974. "Quality Competition, Industry Equilibrium, and Efficiency in the Price-Constrained Airline Market," American Economic Review, American Economic Association, pages 657-669.
    4. Mackie, Peter & Preston, John, 1998. "Twenty-one sources of error and bias in transport project appraisal," Transport Policy, Elsevier, pages 1-7.
    5. Phang, Sock-Yong, 2003. "Strategic development of airport and rail infrastructure: the case of Singapore," Transport Policy, Elsevier, pages 27-33.
    6. Reynolds-Feighan, Aisling J. & Button, Kenneth J., 1999. "An assessment of the capacity and congestion levels at European airports," Journal of Air Transport Management, Elsevier, pages 113-134.
    7. Morrison, Steven A., 1987. "The equity and efficiency of runway pricing," Journal of Public Economics, Elsevier, pages 45-60.
    8. Oum, Tae Hoon & Zhang, Yimin, 1990. "Airport pricing : Congestion tolls, lumpy investment, and cost recovery," Journal of Public Economics, Elsevier, pages 353-374.
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    Cited by:

    1. Yoon, Sung Wook & Jeong, Suk Jae, 2015. "An alternative methodology for planning baggage carousel capacity expansion: A case study of Incheon International Airport," Journal of Air Transport Management, Elsevier, pages 63-74.
    2. Hugo E. Silva & Erik T. Verhoef & Vincent A.C. van den Berg, 2012. "Airlines' Strategic Interactions and Airport Pricing in a Dynamic Bottleneck Model of Congestion," Tinbergen Institute Discussion Papers 12-056/3, Tinbergen Institute, revised 15 Jul 2013.
    3. Wei, Wenbin, 2008. "A new approach to quantify the benefit to air travelers resulting from airport capacity expansion," Journal of Air Transport Management, Elsevier, vol. 14(1), pages 47-49.
    4. Santos, Miguel Gueifão & Antunes, António Pais, 2015. "Long-term evolution of airport networks: Optimization model and its application to the United States," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 73(C), pages 17-46.
    5. Silva, Hugo E. & Verhoef, Erik T. & van den Berg, Vincent A.C., 2014. "Airlines’ strategic interactions and airport pricing in a dynamic bottleneck model of congestion," Journal of Urban Economics, Elsevier, vol. 80(C), pages 13-27.

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