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Heterogeneity in traveler's value of time and allocation of services among multiple airports in a region: Regulation versus pricing

Author

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  • Mun, Se-il
  • Teraji, Yusuke
  • Araki, Taikei

Abstract

This study examines the policy for the efficient allocation of international and domestic flights (allocation of services) among multiple airports in a region, accounting for heterogeneity in the value of time among travelers. In the presence of such heterogeneity, travelers are sorted across multiple airports according to the value of time. We evaluate the welfare effects of two types of policies, namely pricing and regulation policies. Regulation specifies the type of service (international or domestic) to be provided at each airport. We demonstrate that under optimal pricing, such regulation is not required. However, when airport pricing is suboptimal, service regulation may improve efficiency by controlling airport congestion, which may limit travelers’ choices and reduce the benefits of sorting. Numerical simulations utilizing realistic parameters suggest that removing current regulations will improve efficiency.

Suggested Citation

  • Mun, Se-il & Teraji, Yusuke & Araki, Taikei, 2026. "Heterogeneity in traveler's value of time and allocation of services among multiple airports in a region: Regulation versus pricing," Research in Transportation Economics, Elsevier, vol. 117(C).
    • Handle: RePEc:eee:retrec:v:117:y:2026:i:c:s0739885926000375
    DOI: 10.1016/j.retrec.2026.101740
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