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

  • Joseph I. Daniel

    ()

    (Department of Economics,University of Delaware)

  • Katherine Thomas Harback

    (Mitre Corporation)

Registered author(s):

    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.

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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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    Paper provided by University of Delaware, Department of Economics in its series Working Papers with number 05-09.

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    Length: 56 pages
    Date of creation: 2005
    Date of revision:
    Handle: RePEc:dlw:wpaper:05-09
    Contact details of provider: Postal: Purnell Hall, Newark, Delaware 19716
    Phone: (302) 831-2565
    Fax: (302) 831-6968
    Web page: http://www.lerner.udel.edu/departments/economics/department-economics/

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    1. Richard Arnott & Andre de Palma & Robin Lindsey, 1985. "Economics of a Bottleneck," Working Papers 636, Queen's University, Department of Economics.
    2. 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.
    3. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
    4. 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 327-70, March.
    5. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
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