Abstract

http://ssrn.com/abstract=1591312
 
 

References (23)



 


 



Taxing for Takeoff: Estimating Airport Tax Incidence Through Natural Experiments


Edward Huang


TripNotice.com; Harvard Kennedy School (HKS), Belfer Center for Science and International Affairs (BCSIA)

Adib Kanafani


University of California, Berkeley - Department of Civil and Environmental Engineering

January 14, 2010


Abstract:     
We view the different start dates of U.S. airport taxes as replicated natural experiments. In each, a portion of plane tickets are subject to a new tax of $3. We show that airlines, in response, raise nonstop fares by $6.5 and overshift the tax onto their nonstop passengers; however, they keep connecting fares little changed and appear burdened by the tax. The results suggest that airport taxes and other similar taxes encourage airlines to provide more nonstop services, and we argue that these taxes can be redesigned to promote both efficiency and equity.

Number of Pages in PDF File: 19

Keywords: Airport Tax, Tax Incidence, Airline Pricing, Aviation Finance

JEL Classification: D43, H22, R48

working papers series


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Date posted: April 17, 2010  

Suggested Citation

Huang, Edward and Kanafani, Adib, Taxing for Takeoff: Estimating Airport Tax Incidence Through Natural Experiments (January 14, 2010). Available at SSRN: http://ssrn.com/abstract=1591312 or http://dx.doi.org/10.2139/ssrn.1591312

Contact Information

Edward Huang (Contact Author)
TripNotice.com ( email )
19-11 Sanchong Road 4F
Nangang Software Park
Taipei, 115
Taiwan
+886-2-26551566 (Phone)
+886-2-26551577 (Fax)
HOME PAGE: http://TripNotice.com
Harvard Kennedy School (HKS), Belfer Center for Science and International Affairs (BCSIA) ( email )
79 JFK Street
Cambridge, MA 02138
United States
6175759868 (Phone)
6174958963 (Fax)
Adib Kanafani
University of California, Berkeley - Department of Civil and Environmental Engineering ( email )
Berkeley, CA
United States
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