Real Estate Papers

Document Type

Journal Article

Date of this Version

9-2003

Publication Source

American Economic Review

Volume

93

Issue

4

Start Page

1194

Last Page

1215

DOI

10.1257/000282803769206269

Abstract

We examine two factors that explain air traffic congestion: network benefits due to hubbing and congestion externalities. While both factors impact congestion, we find that the hubbing effect dominates empirically. Hub carriers incur most of the additional travel time from hubbing, primarily because they cluster their flights in short time spans to provide passengers as many potential connections as possible with a minimum of waiting time. Non-hub flights at the same hub airports operate with minimal additional travel time. These results suggest that an optimal congestion tax might have a relatively small impact on flight patterns at hub airports.

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Date Posted: 27 November 2017

This document has been peer reviewed.