Airport Efficiency in Pakistan - A Data Envelopment Analysis with Weight Restrictions

David Ennen () and Irem Batool ()
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David Ennen: Institute of Transport Economics, Muenster
Irem Batool: COMSATS Institute, Sahiwal

No 25, Working Papers from Institute of Transport Economics, University of Muenster

Abstract: This paper investigates the airports in Pakistan for potential cost inefficiencies. We identify inefficiencies by benchmarking the productive performance of airports using Data Envelopment Analysis (DEA). To improve the ability of DEA to differentiate performance levels, we analyze airport functions individually, using separate DEA models. In addition, restrictions are imposed on the possible weights of inputs and outputs in the DEA procedure, in order to improve the differentiation of performance. The definition of these weight restrictions is based on additional information on feasible production trade-offs and relative input prices. To the best of our knowledge, this paper provides the first application of predefined weight restrictions in a DEA analysis of airport efficiency. The results suggest that there are cost inefficiencies at several airports, which are mainly caused by overstaffing and overinvestment in capacity. Furthermore, we find that the operational scale of most airports is inefficiently small, so that increases in traffic will result in declining unit costs.

Keywords: Airport; Efficiency; Benchmarking; Data Envelopment Analysis; Pakistan (search for similar items in EconPapers)
JEL-codes: L93 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2017-11
New Economics Papers: this item is included in nep-eff and nep-tre
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Published in Journal of Air Transport Management, 2018, vol. 69, pp. 205-212.

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