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Passenger facility charges in privatized Mexican airports: dynamic panel data evidence on the domestic market

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  • Valdés, Victor
  • Sour, Laura

Abstract

Airport pricing is a key determinant of airport revenue, but has been studied little outside of Europe and the United States. We examine the determinants of domestic Passenger Facility Charges (PFC) in privatised airports over a nine-year period (2006–2014) in Mexico. Using a GMM model, we find that dual-till price cap regulation has had a significant effect on PFC during the post-privatisation period; airports can capture airlines’ market power when setting PFC, and airports increase PFC when domestic passengers becomes more important. These findings illustrate the actual status of Mexican privatised airports and complement the empirical airport pricing literature.

Suggested Citation

  • Valdés, Victor & Sour, Laura, 2017. "Passenger facility charges in privatized Mexican airports: dynamic panel data evidence on the domestic market," MPRA Paper 115596, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:115596
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    JEL classification:

    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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