Real Estate Papers
Title
Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil
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.
Recommended Citation
Mayer, C., & Sinai, T. (2003). Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil. American Economic Review, 93 (4), 1194-1215. http://dx.doi.org/10.1257/000282803769206269
Date Posted: 27 November 2017
This document has been peer reviewed.