Abstract
Imposition of airport congestion pricing redistributes welfare among commercial, regional, and general aviation. This article extends Daniel's [Econometrica63, 327–370 (1995)] stochastic-bottleneck model with dynamically adjusting traffic rates, queuing delays, and congestion fees to include elastic demand, heterogeneous operating time preferences, and heterogeneous layover and queuing time values. Using parameters from Minneapolis-St. Paul airport, simulations of congestion pricing determine its effects on equilibrium traffic patterns, queuing delays, schedule delays, airport revenues, and social welfare. Gains by commercial aviation, common travelers, and airport authorities exceed losses by general and regional aviation. The article evaluates several price-and-rebate programs and proposes several that are self-financing and Pareto improving.
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