American Economic Review Vol. 93 No. 4 2003

Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil

Christopher Mayer¹; Todd Sinai²

¹ The Wharton School, 314 Lauder-Fischer Hall, University of Pennsylvania, 256 South 37th Street, Philadelphia, PA 19104. · ² The Wharton School, 308 Lauder-Fischer Hall, University of Pennsylvania, 256 South 37th Street, Philadelphia, PA 19104, and National Bureau of Economic Research.

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.

DOI

10.1257/000282803769206269

Volume

93

Issue

4

Pages

1194-1215

Language

en

Sources

crossref bibtex:phds-export.bib openalex

Cite

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