Steven A. Morrison

Enhancing the performance of the deregulated air transportation system.

IN A DRAMATIC BREAK with past policy, the U.S. commercial air transportation system was deregulated in 1978. Although deregulation was initially popular, primarily because it led to lowerfares, public uneasiness has recently set in.1 Airport congestion and flight delays, increased concerns with safety, and rising fares in less competitive markets have all been attributed to the change in the regulatory environment. But, as illustrated in figure 1, deregulation is only one among many influences on the air transportation system. Equally influential are technological change, macroeconomic performance, and public policies besides those having to do with economic regulation. Because all these influences are interdependent, each must operate in accord with the others or the system can become disrupted. This paper focuses on improving the air system by aligning public policy regarding mergers, airport pricing and investment, and safety with the traffic volumes and patterns that exist under deregulation. We

A survey of road pricing

Abstract Road Pricing has an established history in the literature of transport economics and has attracted the intermittent attention of policy-makers for many years. The theory has been refined and developed as economists have relaxed the simplifying assumptions of their early work. This paper brings together the wide-ranging literature on road pricing, drawing not only on the standard economic sources but also material that has appeared in the engineering and planning literature. The theory is set in the context of both empirical evidence of the practical viability of road pricing and the political-legal environment in which it must gain acceptance.

Fundamental flaws of social regulation: The case of airplane noise

This article provides an economic assessment of federal regulatory policy toward airplane noise as encapsulated in the 1990 Airport Noise and Capacity Act (ANCA). This act mandated the elimination of certain aircraft, such as the Boeing 727 and DC‐9, from all U.S. airports by the end of 1999 to meet quieter noise requirements. We find that the present discounted benefits of the ANCA, reflected in higher property values for homeowners, fall

The Economic Effects of Airline Deregulation

5 billion short of the ANCAs cost to airlines, reflected in the reduced economic life of their capital stock. More fundamentally, we find that the net benefits that could have been generated by an economically optimal airplane noise tax amount to only

Voting and the efficiency of airport runway investment

0.2 billion (present value). It appears that noise regulations have generated substantial costs to society when, in fact, there was little justification on efficiency grounds for regulatory intervention in the first place.

The Evolution of the Airline Industry

In 1938 the U.S. Government took under its wing an infant airline industry. Government agencies assumed responsibility not only for airline safety but for setting fares and determining how individual markets would be served. Forty years later, the Airline Deregulation Act of 1978 set in motion the economic deregulation of the industry and opened it to market competition. This study by Steven Morrison and Clifford Winston analyzes the effects of deregulation on both travelers and the airline industry. The authors find that lower fares and better service have netted travelers some

Actual, Adjacent, and Potential Competition Estimating the Full Effect of Southwest Airlines

6 billion in annual benefits, while airline earnings have increased by

Empirical Implications and Tests of the Contestability Hypothesis

2.5 billion a year. Morrison and Winston expect still greater benefits once the industry has had time to adjust its capital structure to the unregulated marketplace, and they recommend specific public polices to ensure healthy competition.

The Dynamics of Airline Pricing and Competition

Abstract The median voter model is used to estimate the efficiency of three voting rules in determining runway capacity at airports. The three rules are (1) one vote per airline, (2) one vote per operation (takeoff or landing), and (3) one vote per pound of landing weight. Based on scheduled arrival and departure data from 12 U.S. airports, the rule of one vote per pound of landing weight is shown to be the best of the three rules and is quite efficient if all airlines vote and if airlines pay the full social cost of capacity.