Understanding relative efficiency among airports: A general dynamic model for distinguishing technical and allocative efficiency

A. George Assaf, David Gillen and Mike Tsionas

Transportation Research Part B: Methodological, 2014, vol. 70, issue C, 18-34

Abstract: The paper introduces a new dynamic frontier model that is used to analyze the impact of both ownership and regulation on airport technical and allocative efficiencies. We differentiate between the short and long-term effects. Based on a large sample of international airports, we find in the short-run the majority of the improvements are from reducing technical inefficiency, which come for the most part from adjusting output, something that can be accomplished in the short-term. There are relatively small changes, in the short run, resulting from improving allocative efficiency. We find that adding economic regulation leads to a decrease in technical efficiency in the short-run. Quite different conclusions hold for the long-term; there are improvements available from reducing allocative inefficiency and comparable benefits are available from cutting technical inefficiency. In the long-run we find that technical and allocative inefficiency decreases by moving away from government owned to fully privatized airports and moving away from rigid regulation.

Keywords: Technical efficiency; Allocative efficiency; Short-run; Long-run; Airport ownership and regulation (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (13)

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DOI: 10.1016/j.trb.2014.07.004

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