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Title: Taxing for Takeoff: Estimating Airport Tax Incidence Through Natural Experiments
Accession Number: 01158104
Record Type: Component
Availability: Transportation Research Board Business Office 500 Fifth Street, NW Abstract: We view the varied start dates of airport departure taxes as a series of natural experiments, in each of which plane tickets are subject to different levels of taxes. We show that airlines are able to raise fares of nonstop tickets by more than the taxes applied while leaving fares of connecting tickets little changed. These results provide empirical support for two propositions in economic theory: First, suppliers may ``over-shift'' the tax burden onto consumers under imperfect competition. Second, when two products are taxed, the tax-inclusive price is higher for the product that has a less elastic demand (i.e., nonstop tickets). We argue that there are efficiency and equity gains to be made by revising the current tax schedule. One potential adjustment is to allow some taxes to vary by demand and other direct costs; the revenues can then be used for investments that lower long-run costs and for subsidies to airports and airlines serving smaller communities.
Monograph Title: Monograph Accession #: 01147878
Report/Paper Numbers: 10-1888
Language: English
Corporate Authors: Transportation Research Board 500 Fifth Street, NW Authors: Huang, C. EdwardKanafani, Adib KPagination: 21p
Publication Date: 2010
Conference:
Transportation Research Board 89th Annual Meeting
Location:
Washington DC, United States Media Type: DVD
Features: Figures
(4)
; References
(27)
; Tables
(5)
TRT Terms: Uncontrolled Terms: Subject Areas: Aviation; Finance; Operations and Traffic Management; I10: Economics and Administration; I72: Traffic and Transport Planning
Source Data: Transportation Research Board Annual Meeting 2010 Paper #10-1888
Files: TRIS, TRB
Created Date: Jan 25 2010 10:52AM
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