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Productivity and efficiency of world airlines: an empirical application with order-m and alpha-frontiers

Christophe Bontemps (), Steve Lawford () and Nathalie Lenoir ()
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Nathalie Lenoir: LEEA - ENAC - Laboratoire d'Economie et d'Econométrie de l'Aérien - ENAC - Ecole Nationale de l'Aviation Civile

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Abstract: Using a new database on international airlines, we investigate industry productivity and airline efficiency. First, we question the available methods of input and output measurement. We examine and compare firm-level Total Factor Productivity (TFP) indexes across airlines and over time. We then disentangle various components of the TFP. In particular, productivity and technical change are analyzed at the firm and industry levels using the decomposition proposed by Simar and Wilson (1998) and Wheelock and Wilson (1999). Second, we employ robust frontier estimation techniques (the order-m and alpha-frontiers, developed recently by Daouia, Florens, Simar and others) to compute firm-level efficiencies. We use the order-m and alpha-scores as alternative benchmarks for ranking major airlines by performance. We analyze changes in the ranking of these airlines over time and across airlines types (majors or low cost, US or European, and domestic or international).

Date: 2013-06-18
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Published in EWEPA 2013, European Workshop on Efficiency and Productivity Analysis, Jun 2013, Helsinki, Finland

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