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Do Airlines that Dominate Traffic at Hub Airports Experience Less Delay?

Author

Listed:
  • Joseph I. Daniel

    () (Department of Economics,University of Delaware)

  • Katherine Thomas Harback

    (Mitre Corporation)

Abstract

The desirability of airport congestion pricing largely depends on whether dominant airlines otherwise fail to internalize their self-imposed congestion delays. Brueckner (2002) and Mayer and Sinai (2003) find (weak) statistically significant evidence of internalization. We replicate and extend these models by refining their measures of delay and controlling for fixed and random airport effects. For twenty-seven large US airports, we estimate every flight’s congestion delay attributable to its operating time. These time-dependent queuing delays result from traffic rates temporarily exceeding airport capacity, and are precisely the delays susceptible to peak-load congestion pricing. As modified, the models reject the internalization hypothesis.

Suggested Citation

  • Joseph I. Daniel & Katherine Thomas Harback, 2005. "Do Airlines that Dominate Traffic at Hub Airports Experience Less Delay?," Working Papers 05-09, University of Delaware, Department of Economics.
  • Handle: RePEc:dlw:wpaper:05-09
    as

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    File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2005/UDWP2005-09.pdf
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    References listed on IDEAS

    as
    1. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1990. "Economics of a bottleneck," Journal of Urban Economics, Elsevier, vol. 27(1), pages 111-130, January.
    2. Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, vol. 63(2), pages 327-370, March.
    3. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
    4. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
    5. Christopher Mayer & Todd Sinai, 2003. "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil," American Economic Review, American Economic Association, vol. 93(4), pages 1194-1215, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Hub-and-spoke airline networks; simulated annealing; commercial aviation; airline competition; airline mergers; airfares;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • D6 - Microeconomics - - Welfare Economics

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