Distributional consequences of airport congestion pricing

Imposition of airport congestion pricing redistributes welfare among commer cial. regional, and general aviation. This article extends Daniel's [Econom etrica 63, 327-370 (1995)] stochastic-bottleneck model with dynamically adj usting traffic rates, queuing delays, and congestion fees to include elasti c demand, heterogeneous operating time preferences, and heterogeneous layov er and queuing time values. Using parameters from Minneapolis-St. Paul airp ort. simulations of congestion pricing determine its effects on equilibrium traffic patterns. queuing delays, schedule delays, airport revenues, and s ocial welfare. Gains by commercial aviation. common travelers, and airport authorities exceed losses by general and regional aviation. The article eva luates several price-and-rebate programs and proposes several that are self -financing and Pareto improving. (C) 2001 Academic Press.