can private airport competition improve runway pricing the case of san francisco bay area airports abstract travelers and airlines are frustrated by long and costly travel delays at public airports that are attributable to runway charges that do not account for aircraft congestion because the inefficient charges are likely to persist we explore whether private airport competition could lead to more efficient charges that improve travelers welfare increase airlines profits and enable the airports to be profitable we use the san francisco bay area for our assessment and identify important conditions to achieve those outcomes including competition among separately owned airports bargaining between airports and airlines and the ability of airports to differentiate prices and service

distributional consequences of airport congestion pricing abstract imposition of airport congestion pricing redistributes welfare among commercial regional and general aviation this article extends daniel s econometrica63 327 370 1995 stochastic bottleneck model with dynamically adjusting traffic rates queuing delays and congestion fees to include elastic demand heterogeneous operating time preferences and heterogeneous layover and queuing time values using parameters from minneapolis st paul airport simulations of congestion pricing determine its effects on equilibrium traffic patterns queuing delays schedule delays airport revenues and social welfare gains by commercial aviation common travelers and airport authorities exceed losses by general and regional aviation the article evaluates several price and rebate programs and proposes several that are self financing and pareto improving

airport charges and capacity expansion effects of concessions and privatization abstract this paper examines the decisions on airport charges and capacity expansion made by airports with different objectives we find that allowing an airport to have profitable concession operations may be more welfare improving than the alternative of depriving the airport of all profits from concession operations furthermore the airport charge of a social welfare maximizing airport would be lower than that of a budget constrained public airport which in turn would be lower than that of a privatized airport pursuing profit maximization we also show that a constrained public airport would add capacity later than a social welfare maximizing airport whilst a privatized airport would add capacity later still given that constrained public airports represent the second best situation the capacity decisions of privatized airports would be socially suboptimal

what is new in the new industrial policy a manufacturing systems perspective this paper explores the recent evolution of manufacturing related policies in leading oecd economies germany japan the united kingdom and the united states a novel framework the industrial policy matrix is introduced and then used to illustrate and compare policy approaches in terms of factor inputs intervention levels and degrees of coordination while approaches adopted in different countries vary reflecting their respective contexts there is some evidence of a convergence on the effectiveness of particular programmes and organizations as well as on the characteristics that support the competitiveness of national manufacturing systems including coordination and alignment of related policies partnerships with industry and longer term investment and planning

estimating a third order translog using canadian cross sectional micro data a third order translog is estimated using canadian cross sectional micro data stratified by four family sizes third order terms and family size are found to be statistically important explanatory variables homogeneity and symmetry restrictions are also rejected for the third order translog the translog and the almost ideal demand system directions for future research implied by these results include conditioning the third order translog on more demographic variables or relaxing some aggregation conditions imposed in the model used here

congestion pricing and capacity of large hub airports a bottleneck model with stochastic queues this paper models and estimates congestion prices and capacity for large hub airports the model includes stochastic queues time varying traffic rates and endogenous intertemporal adjustment of traffic in response to queuing delay and fees relative costs of queuing and schedule delays are estimated using data from minneapolis st paul simulations calculate equilibrium traffic patterns queuing delays schedule delays congestion fees airport revenues airport capacity and efficiency gains the paper also investigates whether a dominant airline internalizes delays its aircraft impose it tests game theoretic specifications with atomistic nash dominant stackelberg dominant and collusive airline traffic

triggers of change structural trajectories and production dynamics the transformation of production structures has been at the centre of the historical dynamics of capitalist economies since the first industrial revolution the article concentrates on production processes as principal loci of structural economic dynamics along increasing and decreasing returns trajectories these trajectories are triggered by structural opportunities and constraints embedded in production systems and their historical realisation is subject to different institutional configurations production units at different levels of aggregation the approach envisioned suggests the possibility of governing economic dynamics by structural policies working on the technological and organisational conditions of production as well as on the configuration of production processes within production units capitalist economies have to rely on a mix of co ordination devices across different production units and aggregation levels for capturing structural opportunities and avoiding structural constraints

airport and airline competition for passengers departing from a large metropolitan area abstract in this paper an airport and airline choice model based on a nested multinomial logit model is developed to investigate both airport competition and airline competition in a metropolitan area with multiple departure airports the model can be used to analyze the effects of e g an improvement in accessibility of a specific airport in a metropolitan area it is shown analytically that if the frequency elasticity of demand is smaller than 1 unique airfare frequency and passenger charge equilibria exist next symmetric equilibria are derived analytically their properties are also examined finally asymmetric equilibria are derived numerically while their properties are discussed as well

airport pricing congestion tolls lumpy investment and cost recovery abstract in this paper we investigate the relationship between congestion tolls and capacity expansion costs for congestion prone transportation infrastructures with lumpy investment with constant variable costs and social marginal cost pricing this relationship determines the cost recovery status of an infrastructure authority the theoretical model for optimal user charges and the timing of capacity expansion shows that the relative magnitudes of total congestion tolls and total capacity costs in an investment cycle depend on the time pattern of traffic growth a point overlooked in the literature a queuing model is used to conduct a numerical experiment to determine the cost recovery ratios under various time paths of traffic growth

the equity and efficiency of runway pricing abstract this paper poses and answers the following question if an airport authority is assumed to choose landing fees that maximize a weighted sum of airline consumers surpluses subject to a revenue requirement what set of weights is implied by currently observed fees the model is loosely applied to san francisco international airport the main result is that commuter airlines are much more favored than others

regulation innovation and the introduction of new telecommunications services i examine the effects of fcc regulation on the innovation and introduction of advanced telecommunications services in the united states an interim of lighter regulation provides an experiment to test the regulatory regime s impact the econometric model comprises an arrival process for service innovation followed by a duration process for regulatory delay the number of services the firms created during the interim is 60 99 higher than the model predicts they would have created if the stricter regulation had still been in place overall firms would have introduced 62 more services to consumers during the study period if the regulation had not been in place

comparison of three empirical models of airport congestion pricing abstract we compare three empirical models of airport congestion pricing a standard peak load pricing model with econometrically estimated demand and delay functions morrison 7 morrison and winston 8 a deterministic bottleneck model with traffic adjusting intertemporally to congestion prices vickrey 9 arnott et al 2 and a bottleneck model with time dependent stochastic queuing daniel 4 when implemented using daniel s airport traffic data the models produce similar traffic patterns under weight based pricing but differ significantly under congestion pricing we conclude that structural modeling of stochastic traffic queues and intertemporal substitution is necessary to produce realistic responses of traffic patterns to congestion pricing

congestion pricing of canadian airports abstract under congestion pricing canadian airports would annually save between 72 and 105 million social costs per landing and takeoff decrease about 300 at toronto and vancouver and 50 at calgary and montreal slot constraints fail to eliminate this airport congestion congestion prices are lower on average than existing weight based prices current airport capacity accommodates at least five more years of traffic growth before congestion reaches current levels substantial welfare gains occur even if dominant airlines already internalize their self imposed delays this article calculates equilibrium congestion pricing schedules traffic rates queuing delays layover times and connection times by time of day

do inter city differences in intra city wage differentials have any interesting implications abstract recent research has related characteristics of cities to differences in the distribution of wages across workers with different skill levels we demonstrate that these differences in wage differentials arise naturally as a compensating variation in rosen s theoretical model of inter city wages for example if the income elasticity of demand for housing services is less than unity cities with higher house prices will have smaller money wage differentials between low and high skill workers this result has no implications for differences in either absolute or relative real productivity or welfare of unskilled workers similarly changes in the amenity of an urban area may result in changes in relative wages of skilled and unskilled workers with no implications for real productivity or welfare differentials empirical tests in which housing cost differentials are added as a determinant of inter city differences in an intra urban wage differential model provide empirical confirmation of the theoretical expectations it appears that intra urban money wage differentials differences in the quality of life and variation in the cost of living in each city are jointly determined variables just as rosen s model of inter city wage differentials predicts

learning innovation increasing returns and resource creation luigi pasinetti s original sin of and call for a post classical economics we draw on the seminal contribution to economics by luigi pasinetti respond to his call to reverse what he saw as the original sin of classical economists exacerbated by neoclassical economists namely the assumption of non increasing returns to scale and move towards building a post classical economics we outline the contours of a post classical framework that draws on key themes and contributions from pasinetti on learning technical progress increasing returns resource creation trade and catching up and contributions from within and without economics that are in line with lend support to and challenge it we advocate the pressing need and opportune timing for a concerted effort to revitalise ideas from the once vibrant cambridge school of economics and help develop a fresh more pluralist and inclusive post classical economics that cuts across divides and opens up opportunities for a less dismal science

pricing the major us hub airports abstract implementing congestion pricing at 27 major us airports would reduce delays by 13 passenger years and 1000 aircraft hours every day saving 3 5 million dollars daily chicago and atlanta would save about 1000 dollars per aircraft airport revenues would increase about 11 million dollars daily a bottleneck model with stochastic queues estimates substantial welfare gains whether or not airlines internalize self imposed delays erroneously imposing fees from the non internalizing specification on internalizing airlines however would be a costly mistake the model calculates equilibrium traffic rates queuing delays layover times connection times and congestion fee schedules by minute of the day

the economics of airport congestion pricing abstract conventional economic wisdom suggests that congestion pricing would be an appropriate response to cope with the growing congestion levels currently experienced at many airports several characteristics of aviation markets however may make naive congestion prices equal to the value of marginal travel delays a non optimal response this paper develops a model of airport pricing that captures a number of these features the model in particular reflects that 1 airlines typically have market power and are engaged in oligopolistic competition at different sub markets 2 part of external travel delays that aircraft impose are internal to an operator and hence should not be accounted for in congestion tolls and 3 different airports in an international network will typically not be regulated by the same authority we present an analytical treatment for a simple two node network and some numerical results to illustrate our findings some main conclusions are that second best optimal tolls are typically lower than what would be suggested by congestion costs alone and may even be negative and that cooperation between regulators need not be stable but that non cooperation may lead to welfare losses also when compared to a no tolling situation

multinational enterprises service outsourcing and regional structural change this paper offers a joint analysis of two phenomena characterizing most advanced economies in recent decades the rise of foreign ownership in manufacturing activities and the pervasiveness of the service economy the aim of the study is to examine the structural transformation of regional economic systems within the uk by focusing on the role played by foreign multinational enterprises mnes in manufacturing in facilitating the development of services from a conceptual perspective this research relies on different strands of literature on the impact of foreign direct investment fdi on recipient economies on outsourcing and regional structural transformation and on the identification of local multipliers the empirical analysis focuses on a specific demand side channel for structural change the forward linkage established by foreign manufacturing mnes with local service providers through outsourcing descriptive evidence shows that service outsourcing by foreign plants operating in manufacturing is pervasive compared to outsourcing by their domestic counterparts on this basic premise we estimate the multiplicative effects that foreign manufacturing activity has on the creation of service jobs in local labour markets in order to produce reliable estimates of a local multiplier the methodology adopts an instrumental variable approach our findings suggest that foreign presence in manufacturing can be a catalyst of regional structural change by stimulating the generation of new jobs in the tertiary sector via demand linkages

optimal metering in the bottleneck congestion model abstract this paper examines whether metering entry to highways can reduce commuting costs we consider a modified version of the bottleneck congestion model which includes travel time downstream of the bottleneck the highway authority s choice of an entry rate enables it to substitute queuing time for travel time the authority s choice is constrained by the road s speed flow curve we find that the benefits of metering increase as the speed that would prevail in the absence of metering decreases and as the speed flow curve gets flatter the major cost of metering is providing a holding area for vehicles waiting to enter

price vs quantity based approaches to airport congestion management abstract this paper analyzes price and quantity based approaches to management of airport congestion using a model where airlines are asymmetric and internalize congestion under these circumstances optimal congestion tolls are differentiated across carriers and a uniformity requirement on airport charges as occurs when slots are sold or tolls are uniform distorts carrier flight choices flight volumes tend to be too low for large carriers and too high for small carriers but quantity based regimes where the airport authority allocates a fixed number of slots via free distribution or an auction lead carriers to treat total flight volume and thus congestion as fixed and this difference generates an efficient outcome as long as the number of slots is optimally chosen

systematic peak load pricing congestion premia and demand diverting empirical evidence abstract this paper finds empirical support to systematic peak load pricing in airlines higher fares in ex ante known congested periods it estimates a congestion premia and supports the main empirical prediction in gale and holmes gale i holmes t 1993 advance purchase discounts and monopoly allocation of capacity american economic review 83 135 146 less discount seats on peak flights

prices capacities and service levels in a congestible bertrand duopoly we study the duopolistic interaction between congestible facilities that supply perfect substitutes and that make sequential decisions on capacities and prices the consumers time cost of accessing or using a facility is determined by the volume capacity ratio we analyze duopoly prices capacities and service quality defined as the inverse of time costs of using the facility and compare the results to monopoly and first best outcomes findings include the following first while price competition between duopolists is beneficial for consumers introducing capacity competition is harmful the duopolist offers lower service quality than the monopolist who does provide the socially optimal quality level second higher marginal costs of capacity may increase profits third asymmetric nash equilibria may result even when firms are ex ante identical more specifically when capacity is cheap or demand is relatively inelastic the only stable equilibria are asymmetric in such an equilibrium the large facility provides high quality at a high price and the smaller facility offers lower quality at lower prices in other words there is endogenous product differentiation by ex ante identical firms

the economic effects of non optimal pricing and investment policies for substitutable transport facilities a dynamic simulation model of subbstitutable transportation facilities demonstrated the welfare revenue and capacity implications of various non optimal pricing and investment policies applications to a major airport and an urban transportation system an expressway and a subway showed that in both cases the welfare surface surrounding the optimal policy is relatively flat for a substantial range and that existing policies are also on this range for both transportation systems a policy of financial self sufficiency is on this range for the airport but not for the urban transportation system author

on the efficiency of competitive markets for operating licenses some economists and policy makers have suggested that market allocation of scarce operating licenses broadcasting licenses and airport slots for instance would lead to their efficient use this paper demonstrates that a competitive market allocation of operating licenses whether attained through auctioning selling or allowing resale of the rights does not in general assure efficiency the profit criterion that would guide the allocation of licenses in a competitive market would not necessarily lead to the uses that maximize social benefits the paper shows that the difference between private and social incentives in the allocation process can be quite large the theory is then applied to discussions of allocating airport takeoff and landing slots and broadcasting licenses

the economies of massed reserves the economy of massed reserves first mentioned by e a g robinson 1958 pp 26 27 is now firmly established in the industrial organization literature as an example of a potential plant level scale economy the massing of reserves results in a savings in the proportion of required reserves to expected output as the scale of a facility increases examples of such reserves are bank tellers specialized tools and equipment repairmen inventories spare parts and checkout lines the potential economies from massing reserves are dependent on the underlying stochastic processes governing the supply and or demand of the service provided theoretical justification for the economies of massed reserves has usually been based on an appeal to the law of large numbers for example donald hay and derek morris wrote the law of large numbers makes the number of breakdowns more predictable in a plant using a large number of machines so that the number of stand by maintenance staff need not be increased in proportion to size 1979 p 44 this paper demonstrates that the law of large numbers does not provide a theoretical explanation of massed reserves scale economies instead it is shown that the expected economies of massed reserves can be calculated from the steady state properties of well known queuing models queuing models apply to any case where a servicing input is held in reserve to cope with the stochastic nature of the market or production process in addition a method for quantifying the expected economies of queuing processes is developed the magnitude of these expected economies is shown to be significant and calculable for example the expected economies inherent in a widely applied queuing model are shown to exceed 23 percent in some cases section i establishes the irrelevance of the law of large numbers as a theory of scale economies section ii provides a formal method for determining the scale economies inherent in the most often mentioned massed reserves example machine repair section iii shows that the same method can be used to calculate scale economies for the remaining massed reserves examples specialized repair tools and equipment checkout counter clerks bank tellers and other service personnel capacity and inventories and spare parts in addition it is demonstrated that the same method can be used to calculate scale economies for some multiproduct operations

sequential peak load pricing the case of airports and airlines we investigate airport peak load pricing using a vertical structure of airport and airlines we find that a profit maximizing airport would charge higher peak and off peak runway prices and a higher peak off peak price differential than a public airport consequently airport privatization would lead to both fewer total passengers and fewer passengers in the peak period although peak travelling passengers benefit from fewer delays this low level of peak congestion is not efficient suggesting that airport privatization cannot be judged based on its effect on congestion alone we also examine pricing behaviour of a public airport constrained to charge a time independent price on etudie la tarification de pointe dans une structure verticale d aeroports et de compagnies d aviation on decouvre qu un aeroport qui maximise ses profits chargerait des prix plus eleves pour l usage des pistes tant aux heures de pointe qu en autre temps qu un aeroport public ainsi qu un differentiel plus grand entre ces differents moments en consequence la privatisation des aeroports va entrainer a la fois moins de passagers et moins de passagers aux heures de pointe meme si ceux qui voyagent aux heures de pointe vont devoir subir moins de delais cette moindre congestion n est pas efficace voila qui suggere qu on ne doit pas evaluer la privatisation des aeroports seulement a l aune de l impact sur la congestion les auteurs examinent aussi les strategies de tarification d un aeroport public contraint a imposer une tarification qui ne peut varier selon le moment d usage dans le temps

technical change and scale economies given stochastic demand and production abstract this paper provides a formal attempt to separate the effects of changes in scale and technology for a relatively general class of queuing models the paper makes a distinction between the output rate and capacity while changes in technology affect the output rate and lead to larger indivisible production units this change in the output rate has often been confused in the literature as a change in scale as a result the importance of scale economies claimed has often been due more to the potential for technological change not the potential for scale economies inherent to these queuing processes

the pricing of sports events do teams maximise profit a model of price setting behaviour by national hockey league teams based on the assumption of profit maximization is developed estimated and tested the model implies parameter restrictions across equations of a two equation simultaneous nonlinear econometric model tested by a likelihood ratio test and implies restrictions on the first and second derivatives of the revenue function tested with wald tests the results in large measure support the hypothesis that hockey teams are profit maximizers in contrast to some suggestions in the literature the analysis provides an attractive example of the potential of sports data for testing behavioural hypotheses in economics

the architecture and dynamics of industrial ecosystems diversification and innovative industrial renewal in emilia romagna the paper aims at advancing our understanding of the architecture and diversification dynamics of industrial ecosystems and identifying policies for the innovative industrial renewal of mature economies industrial ecosystems are here defined as multi tiered production systems involving heterogeneous agents operating in sectoral value chains and contributing to the capability domains of the ecosystem and its participants with closely complementary but dissimilar sets of resources and capabilities the geographical boundaries of the industrial ecosystem are shaped by the evolving interdependencies linking organisations within the ecosystem and by the new linkages consolidating beyond that thus the industrial ecosystem is a structured production space centred mainly on its productive organisations as well as other institutions intermediaries and demand side actors purposefully involved in co value creation processes along various types of diversification and innovative industrial renewal trajectories drawing on a five year research programme in the emilia romagna industrial ecosystem a number of case studies are introduced to highlight these trajectories and the underpinning structural learning dynamics the paper concludes by identifying a number of policy implications focusing on strategies for enhancing the structural readiness of the industrial ecosystem and promoting smart diversification and innovative industrial renewal policies jel classifications d20 o25 o30

excludable public goods pricing and social welfare maximization abstract we compare two pricing strategies buffet pricing and usage pricing of excludable public goods for social welfare maximization buffet pricing is better than usage pricing for low consumer heterogeneity while the opposite holds for high consumer heterogeneity

capabilities structure agency and evolution this paper examines conceptual issues and reviews empirical results bearing on the relationship between research approaches emphasizing organizational capabilities and those based in transaction cost economics tce or in organizational economics more generally following a review of conceptual fundamentals what capability is and why organizations differ in capability it assesses recent progress toward an integration of the capabilities and transaction cost approaches primarily in the context of the analysis of vertical structure and related phenomena this review suggests that progress has been substantial and that the key elements of a promising dynamic synthesis have been identified the paper then considers issues that call for attention if further progress is to be achieved the first of these is the role of agency which must be seen in expansive terms relative to standard economic rationality if its evolutionary significance is to be fully appreciated the second is the role of structure or more specifically industry architecture which affects capability development by way of its effect on the feedback that firms receive after drawing on the recent financial crisis for an illustration of these ideas this paper considers the rise of interest in business models as a useful field of application and it concludes with a discussion of the role of organizational economics beyond tce we argue that whatever the theoretical perspective at the level of the firm analyses must reach beyond that level to grasp the important causal forces affecting capability development firm boundaries and structural features more generally

structural cycles and industrial policy alignment the private public nexus in the emilian packaging valley the article investigates changes in the interaction between business organisations local governments and public technology intermediaries resulting from business organisations shifts towards higher value product segment opportunities specifically we analyse how local governments can or not align their industrial policies to the industrial transformations both technological and organisational underpinning firms value creation capture dynamics the concept of structural cycle is introduced here to study the two interdependent processes of technology transition and organisational reconfiguration characterising those firms shifting towards higher value product segments this private public nexus is investigated in the emilian packaging valley context the mixed method study focuses on the case of ima spa its shifts from the food to the pharmaceutical value product segment of the packaging machine industry and its changing relationships with regional public policies and institutions a number of industrial policy implications for sustainable value creation dynamics in local production systems are finally derived

another look at airport congestion pricing we study alternate approaches to implement congestion pricing at us airports conventional formulations toll all aircraft without determining whether a plane operated by a given airline delays other planes that it operates or planes operated by other airlines recent work points out optimal pricing calls for carriers to be charged only for the delay they impose on other airlines we find a small difference between the net benefits generated by the two congestion pricing policies because the bulk of airport delays are not internalized and because the efficiency loss from pricing internalized congestion is small jel l11 l93 r41

viewpoint measuring the well being of the poor with income or consumption a canadian perspective there is a long tradition of using consumption measures derived from statistics canada s household expenditures surveys to study material well being inequality and poverty we offer an introduction to this research income and consumption measures give different pictures of the patterns of material well being in canada but the differences are not as large as in the us we also provide a comparison to meyer and sullivan s results on data quality canadian expenditure surveys are of high quality unique aspects of these surveys variation in quality control measures over time and the possibility of comparing to income tax data provide important insights into the quality of survey data on income and consumption il existe une longue tradition d utilisation de mesures de consommation derivees de l enquete des depenses des menages de statistiques canada pour mesurer le bien etre materiel l inegalite et la pauvrete les auteurs presentent ces recherches les mesures de revenus et de consommation donnent des portraits differents des patterns de bien etre materiel au canada mais les differences ne sont pas aussi importantes qu aux etats unis on presente une comparaison avec les resultats de meyer et sullivan sur la qualite des donnees les enquetes sur les depenses sont de haute qualite au canada certains aspects uniques de ces enquetes variation dans les mesures de controle de qualite dans le temps et possibilite de comparer les donnees derivees des rapports d impot sur le revenu fournissent des apercus importants sur la qualite des donnees d enquetes sur le revenu et la consommation canadian economics association

the incidence of congestion tolls on urban highways abstract the incidence of an optimal short run congestion toll is investigated using an equilibrium model of modal choice and congestion on a highway corridor served by express bus transit it is argued that for an externality tax the usual equi revenue analysis of burdens is inappropriate instead welfare effects are computed under three alternative assumptions about redistribution of toll revenues in almost all cases the net result is benefits for all income groups it is concluded that congestion tolls should not be rejected on grounds of income distribution but that an explicit package of tolls and revenue uses is probably a political prerequisite for adoption

economics of a bottleneck abstract drawing on vickrey amer econ rev 59 251 261 1969 and subsequent literature this paper provides a thorough economic analysis of the simplest bottleneck model of road congestion with peak load demand in the morning rush hour a fixed number of identical individuals one per car must travel from home to work between which is a bottleneck of given capacity the costs of travel include queuing time and schedule delay time early or late for work the frequency distribution of departure times adjusts so that in equilibrium all individuals have the same travel costs the paper extends the previous literature by examining a coarse toll and solving for optimal capacities the application of congestion tolls can generate efficiency gains by altering the frequency distribution of departure times previous estimates of the efficiency gains from congestion tolling are likely to be substantially downward biased because they have ignored this effect