The influence of the operational environment on efficiency of international airports

Summary Heterogeneity must be considered in the efficiency analysis of decision-making units; otherwise, the results will be strongly biased. This is also valid for airport management where the operational environment heavily influences efficiency. In this paper, conditional efficiency measures are applied to airports to incorporate heterogeneity in non-parametric frontier models which are robust for outlying observations. In particular, the influence of the operational environment on airport efficiency is examined in a sample of 141 international airports. The conclusions show that the operational environment indeed matters and that privatisation, regulation, traffic transfer and the dominant carrier have a positive effect on efficiency, whereas aeronautical revenues influence it negatively. Copyright © 2014 John Wiley & Sons, Ltd.

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