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An evaluation of yardstick regulation for European airports

Author

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  • Reinhold, Annika
  • Niemeier, Hans-Martin
  • Kamp, Vanessa
  • Müller, Jürgen

Abstract

The European airport industry is subject to various forms of economic regulation and there is debate as to which of the systems provides the best incentives for allocative and productive efficiency. This paper deals with the applicability of benchmarking as a regulatory tool for airports. This form of regulation aims at evaluating the cost level of a firm by comparing it to the mean marginal cost structure of all other firms in the market. The paper investigates the difficulties arising from airport benchmarking as well as the benefits that might be derived from it by drawing lessons from benchmark regulation in other industries and the few cases where it has been applied to airports. In particular, it assesses whether yardstick regulation is a feasible alternative to the existing forms of economic regulation or whether yardsticks are more useful for internal management purposes.

Suggested Citation

  • Reinhold, Annika & Niemeier, Hans-Martin & Kamp, Vanessa & Müller, Jürgen, 2010. "An evaluation of yardstick regulation for European airports," Journal of Air Transport Management, Elsevier, vol. 16(2), pages 74-80.
    • Handle: RePEc:eee:jaitra:v:16:y:2010:i:2:p:74-80
    DOI: 10.1016/j.jairtraman.2009.10.005
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    References listed on IDEAS

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    1. Baldwin, Robert & Cave, Martin & Lodge, Martin, 2011. "Understanding Regulation: Theory, Strategy, and Practice," OUP Catalogue, Oxford University Press, edition 2, number 9780199576098.
    2. Müller, Jürgen & Kamp, Vanessa & Niemeier, Hans-Martin, 2005. "Can we learn from benchmarking studies of airports and where do we want to go from here?," Working Papers 28, Berlin School of Economics and Law, Institute of Management Berlin (IMB).
    3. Odoni, Amedeo R. & de Neufville, Richard, 1992. "Passenger terminal design," Transportation Research Part A: Policy and Practice, Elsevier, vol. 26(1), pages 27-35, January.
    4. Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
    5. Timothy J. Coelli & D.S. Prasada Rao & Christopher J. O’Donnell & George E. Battese, 2005. "An Introduction to Efficiency and Productivity Analysis," Springer Books, Springer, edition 0, number 978-0-387-25895-9, December.
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    Cited by:

    1. Adler, Nicole & Liebert, Vanessa, 2014. "Joint impact of competition, ownership form and economic regulation on airport performance and pricing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 64(C), pages 92-109.
    2. Güner, Samet & Cebeci, Halil İbrahim & Antunes, Jorge Junio Moreira & Wanke, Peter F., 2021. "Sustainable efficiency drivers in Eurasian airports: Fuzzy NDEA approach based on Shannon's entropy," Journal of Air Transport Management, Elsevier, vol. 92(C).
    3. Barros, Carlos P. & Bin Liang, Qi & Peypoch, Nicolas, 2013. "The efficiency of French regional airports: An inverse B-convex analysis," International Journal of Production Economics, Elsevier, vol. 141(2), pages 668-674.
    4. Paraschi, Elen Paraskevi & Georgopoulos, Antonios & Papatheodorou, Andreas, 2020. "Abiotic determinants of airport performance: Insights from a global survey," Transport Policy, Elsevier, vol. 85(C), pages 33-53.
    5. Nicolò Avogadro & Sebastian Birolini & Mattia Cattaneo & Paolo Malighetti & Chiara Morlotti & Renato Redondi, 2020. "Yardstick Regulation in a Competitive Context? The Case of the Italian Airports," Competition and Regulation in Network Industries, , vol. 21(3), pages 244-274, September.
    6. Zhang, Baocheng & Wang, Jianzhong & Liu, Changyou & Zhao, Yifei, 2012. "Evaluating the technical efficiency of Chinese airport airside activities," Journal of Air Transport Management, Elsevier, vol. 20(C), pages 23-27.
    7. Valdes, Victor & Corzo, Oscar & Canfield, Carlos, 2024. "Airport incentive regulation in practice," Journal of Air Transport Management, Elsevier, vol. 117(C).
    8. Elliott, Dan & Ong, Annabelle, 2018. "Incentive regulation for airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 115-126.
    9. lo Storto, Corrado, 2018. "Ownership structure and the technical, cost, and revenue efficiency of Italian airports," Utilities Policy, Elsevier, vol. 50(C), pages 175-193.

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