The Full Cost of Air Travel

David Gillen and David Levinson

No 199901, Working Papers from University of Minnesota: Nexus Research Group

Abstract: In this paper we review the theoretical and empirical literature on the cost structure of the provision of air transportation and specify and estimate our own cost functions. We develop a full cost model which identifies the key cost components and then we measure those costs component by component: user costs, carrier costs, infrastructure costs, time and congestion costs, noise costs, accident costs, and pollution costs. Applying the models to data for domestic air travel in the California Corridor, the total long run average cost is estimated to be $0.13 per passenger kilometer traveled. The single largest cost category is owning and operating a plane. In general, because of large fixed cost components, the average cost of infrastructure exceeds the marginal cost.

JEL-codes: D21 D24 R40 R48 (search for similar items in EconPapers)
Date: 1999
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Transportation Research Record :Journal of the Transportation Research Board 1662: 1-9.

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http://hdl.handle.net/11299/179866 First version, 2007 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:nex:wpaper:fullcostairtravel

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