Air transportation is a major facilitator of international trade in terms of the value of goods and services involved, and is important to specific industries, such as tourism, that are being developed by many lower income countries. High air transportation costs can pose a major impediment to...

© 2005 LSE and the University of Bath

Optimal economic charging for transportation infrastructure requires the meeting of numerous conditions to achieve first-best traffic flows. In practice, these types of assumption are not met, and first-best pricing is seldom tenable. Second-best approaches pose particular problems for atomistic...

An S-shaped curve relating service frequency with market share of passengers is often claimed to explain why airlines seek to increase the frequency of their services. An increase in frequency beyond some point brings about a more than proportional increase in patronage and, indirectly, in...

Economic rent seeking is the raison d'être of a commercial undertaking and acts as the manipulator of Adam Smith's 'invisible hand'. The retention of economic rent, however, can cause undesirable distortions, especially if it persists over a long period. Public policy, therefore, often seeks to...