AIRPORT PRICING: CONGESTION TOLLS, LUMPY INVESTMENT, AND COST RECOVERY. IN: AIR TRANSPORT

This paper investigates the relationship between total congestion tolls and capacity costs, for congestion-prone transportation infrastructures. A model is developed which explicitly incorporates the lumpy nature of capacity expansion and demand fluctuations within a given day and over time. With constant variable costs and social marginal cost pricing, this relationship determines the cost recovery status of an infrastructure authority. The theoretical model for optimal user charges and the timing of capacity expansion shows that the relative magnitudes of total congestion tolls and total capacity costs in an investment cycle depend on the time pattern of traffic growth. A numerical experiment based on the runway services at the Toronto International Airport uses a queuing model to demonstrate the extent to which the cost recovery ratios vary across different scenarios for the time path of traffic growth. Empirical results suggest that the larger the capacity of an existing facility, the higher the ratio of congestion toll revenue to the capacity cost.

  • Availability:
  • Supplemental Notes:
    • This paper was originally published in Journal of Public Economics, 43(3), December 1990, pp 353-374.
  • Corporate Authors:

    Edward Elgar Publishers

    William Pratt House, 9 Dewey Court
    Northampton, MA  United States  01060-3815
  • Authors:
    • Oum, T H
    • Zhang, Y
  • Publication Date: 2002

Language

  • English

Media Info

  • Features: Figures; References; Tables;
  • Pagination: p. 553-574
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00961857
  • Record Type: Publication
  • ISBN: 1840645490
  • Files: TRIS
  • Created Date: Aug 24 2003 12:00AM