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Estimating the marginal costs of airport operation using multivariate time series models with correlated error terms

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  • Link, Heike
  • Götze, Wolfgang
  • Himanen, Veli

Abstract

This paper explores insights about marginal airport costs that can be gained by analysing labour inputs and their variability. Based on hourly cost and traffic data for the airport of Helsinki, a multivariate time series approach is used incorporating correlated error terms to account for random shocks such as delays. We found for most airport services a linear relationship between labour input and aircraft movements, except for producing passenger services for international departing flights where a cubic cost relationship was estimated. The findings are comparable with earlier studies for US airports.

Suggested Citation

  • Link, Heike & Götze, Wolfgang & Himanen, Veli, 2009. "Estimating the marginal costs of airport operation using multivariate time series models with correlated error terms," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 41-46.
    • Handle: RePEc:eee:jaitra:v:15:y:2009:i:1:p:41-46
    DOI: 10.1016/j.jairtraman.2008.07.003
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    References listed on IDEAS

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    7. Heike Link & Wolfgang Götze & Veli Himanen, 2006. "Estimating the marginal costs of airport operation by using multivariate time series model with correlated error terms," Working Papers 11, Institute of Transport Economics, University of Muenster.
    8. Steven A. Morrison & Clifford Winston, 1989. "Enhancing the Performance of the Deregulated Air Transportation System," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1989 Micr), pages 61-123.
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