Passenger facility charge vs. airport improvement program funds: A dynamic network DEA analysis for U.S. airport financing

Young-Tae Chang, (Kevin) Park, Hyosoo, Bo Zou and Nabin Kafle

Transportation Research Part E: Logistics and Transportation Review, 2016, vol. 88, issue C, 76-93

Abstract: Passenger Facility Charge (PFC) and the Airport Improvement Program (AIP) are two major sources to finance U.S. airports. This paper develops a novel dynamic network DEA framework to investigate the substitutability between PFC and AIP funds. We find that the studied U.S. airports can substitute PFC for 8–35% of the current AIP funds and contribute significantly to the proposed plan of the US congress to cut AIP funding. In addition, the amount of PFC-for-AIP funds substitution negatively correlates with the productive efficiency of airports. The findings send an important message for future policy reforms on U.S. airport financing.

Keywords: Passenger Facility Charge (PFC); Airport Improvement Program (AIP); Substitution; Dynamic network DEA; Airport efficiency (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (15)

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DOI: 10.1016/j.tre.2016.02.001

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