The Impacts of Airport Centrality in the EU Network and Inter- Airport Competition on Airport Efficiency

Malighetti, G and Martini, G and Paleari, S and Redondi, R (2009): The Impacts of Airport Centrality in the EU Network and Inter- Airport Competition on Airport Efficiency.

Abstract

In this paper we study the relationship between airport efficiency and two factors: an airport’s centrality in the EU network, and the intensity of competition from alternative airports in the same catchment area. We apply a two-stage econometric model based on the Simar & Wilson (2007) bootstrap procedure to a balanced sample of 57 European airports. We also design and compute our own measures of airport centrality and competition. The results show that efficiency is positively related to centrality in the European network, as measured by a weighted sum of minimal paths passing through the airport in question. The intensity of competition between airports also has a positive effect on efficiency. Our analysis suggests that air transportation policies should focus on increasing competition within important catchment areas (e.g., by investing in infrastructure facilitating access to alternative airports) and enhancing the connectivity of the EU network (e.g., by subsidizing new point-to-point connections between airports with capacity to spare).

• Item Type: MPRA Paper
• Language: English
• Keywords: air transportation, efficiency, network centrality, inter – airports competition.
• Subjects: L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L93 - Air Transportation; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms; L - Industrial Organization > L5 - Regulation and Industrial Policy > L59 - Other

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