Airline Emission Charges: Effects on Airfares, Service Quality, and Aircraft Design

Jan Brueckner and Anming Zhang

No 2547, CESifo Working Paper Series from CESifo

Abstract: This paper explores the effect of airline emissions charges on airfares, airline service quality, aircraft design features, and network structure, using a detailed and realistic theoretical model of competing duopoly airlines. These impacts are derived by analyzing the effects of an increase in the effective price of fuel, which is the path by which emissions charges will alter airline choices. The results show that emission charges will raise fares, reduce flight frequency, increase load factors, and raise aircraft fuel efficiency, while having no effect on aircraft size. Given that these adjustments occur in response to the treatment of an emissions externality that is currently unaddressed, they represent efficient changes that move society closer to a social optimum.

Keywords: emissions; airlines (search for similar items in EconPapers)
JEL-codes: L93 Q50 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Airline emission charges: Effects on airfares, service quality, and aircraft design (2010)
Working Paper: Airline Emission Charges: Effects on Airfares, Service Quality, and Aircraft Design (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2547

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