Scarcity, Market Power, and Prices at Slot-constrained Airports: Evidence from Mexico City. (1st April 2019)

• Record Type: Journal Article
• Authors: Arcelus, Almudena; Booth, Ryan; Fix, Aaron; Lehmann, Jee-Yeon; Mantovanelli, Federico; Pindyck, Robert
• Is Part Of: Journal of transport economics and policy. Volume 53:Number 2(2019:Apr.)
• Page Start: 119
• Page End: 134
• Publication Date: 2019-04-01
• Subjects: Transportation -- Periodicals; 388.05
• DOI: NO_DOI
• Languages: English
• ISSNs: 1754-5951

Abstract

Many of the world's major airports are both slot-constrained, meaning that demand for take-offs and landings exceeds airport capacity at certain time periods, and concentrated, meaning that a single airline operates a large share of take-offs and landings. Slot constraints and slot concentration can each lead to higher average fares, but for different reasons that may require different policy prescriptions. In this article, we demonstrate how policy makers can differentiate between the effects of scarcity and concentration on prices, and we apply our methodology to a recent investigation into the allocation of take-off and landing slots at Mexico City's airport.