IDEAS home Printed from https://ideas.repec.org/p/edj/ceauch/322.html

The Joy of Flying: Efficient Airport PPP contracts

Author

Listed:
  • Eduardo Engel
  • Ronald Fischer
  • Alexander Galetovic

Abstract

We examine optimal contracts for PPPs which receive revenue from user fees as well as ancillary commercial revenue, for example from commercial space in the case of airports. We assume that demand for the project is exogenous. Ancillary revenue is observable and requires effort by the concessionaire. If this additional revenue is proportional to demand for the underlying PPP project, we show that the optimal contract of the concessionaire eliminates all exogenous risk but retains a fraction of the endogenous risk. The contract can be implemented via a standard Present-Value-of-Revenue (PVR) auction (Engel et al., 2001). JEL classiffications: H440, R420, L51 Key words: Creation-Date: 2015

Suggested Citation

  • Eduardo Engel & Ronald Fischer & Alexander Galetovic, "undated". "The Joy of Flying: Efficient Airport PPP contracts," Documentos de Trabajo 322, Centro de Economía Aplicada, Universidad de Chile.
    • Handle: RePEc:edj:ceauch:322
    as

    Download full text from publisher

    File URL: http://www.cea-uchile.cl/wp-content/uploads/doctrab/ASOCFILE120151204161014.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shi, Shasha & Tuo, Yuhui & Pan, Meixu & Yin, Yafeng & Chen, Yue & Zhou, Xiongwei & Chen, Ke, 2024. "Signaling contracts design for Build–Operate–Transfer roads under asymmetric traffic demand information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    2. Athena Roumboutsos & Alenka Temeljotov-Salaj & Iosif Karousos, 2020. "Indicators for Sustainable Demand Risk Allocation in Transport Infrastructure Projects," Sustainability, MDPI, vol. 12(22), pages 1-23, November.
    3. Shi, Shasha & Yin, Yafeng & An, Qingxian & Chen, Ke, 2021. "Optimal build-operate-transfer road contracts under information asymmetry and uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 152(C), pages 65-86.
    4. Zheng, Shiyuan & Zhang, Anming & Wang, Kun & Fu, Xiaowen, 2025. "Airport city and downtown store competition and regulation under incomplete information," Transportation Research Part B: Methodological, Elsevier, vol. 192(C).
    5. Achard, Paola Olimpia & Di Berardino, Antonina, 2018. "Public Private Partnerships: Strategic Assets and Managerial Models," 29th European Regional ITS Conference, Trento 2018 184925, International Telecommunications Society (ITS).
    6. Chih-Yao Huang & Ren-Jye Dzeng, 2019. "Evaluating Ancillary Business Scale for PPP-BOT Projects: A Social Housing BOT Case in Taiwan," Sustainability, MDPI, vol. 11(5), pages 1-17, March.
    7. Xia, Siyi & Ma, Hengfei & Hu, Rong & Jiang, Changmin & Xiao, Yi-bin, 2025. "The impact of sustainable aviation fuel quota mandates on the optimal on-airport fuel facility ownership," Transportation Research Part A: Policy and Practice, Elsevier, vol. 200(C).
    8. Zhao, Jianfeng & Liu, Henry J. & Love, Peter E.D. & Greenwood, David J. & Sing, Michael C.P., 2022. "Public-private partnerships: A dynamic discrete choice model for road projects," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    9. Zheng, Shiyuan & Jia, Rongwen & Shang, Wen-Long & Fu, Xiaowen & Wang, Kun, 2023. "Promote transport facility Resilience: Persuasion or Subsidy?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).

    More about this item

    Keywords

    ;

    JEL classification:

    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:edj:ceauch:322. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ceuclcl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.