Ownership Forms Matter for Airport Efficiency: A Stochastic Frontier Investigation of Worldwide Airports

Abstract:     
We study the effects of ownership forms on airports' cost efficiency by applying stochastic frontier analysis to a panel data of the world's major airports. Our key findings are: (a) Countries considering privatization of airports should transfer majority shares to the private sector; (b) Mixed ownership of airport with a government majority should be avoided in favor of even 100% government owned public firm; (c) U.S. airports operated by port authorities should consider to transfer ownership/management to independent airport authorities; and (d) Privatization of one or more airports in cities with multiple airports would improve the efficiency of all airports.

Number of Pages in PDF File: 44

Keywords: ownership forms, airports, translog cost system, stochastic frontier, Bayesian approach

JEL Classification: H11, D24, C11

Accepted Paper Series