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Title:Airline emission charges: effects on airfares, service quality, and aircraft design PDF Logo
Authors:Brueckner, Jan Keith
Zhang, Anming
Issue Date:2009
Series/Report no.:CESifo working paper 2547
Abstract:This paper explores the effect of airline emissions charges on airfares, airline service quality, aircraft design features, and network structure, using a detailed and realistic theoretical model of competing duopoly airlines. These impacts are derived by analyzing the effects of an increase in the effective price of fuel, which is the path by which emissions charges will alter airline choices. The results show that emission charges will raise fares, reduce flight frequency, increase load factors, and raise aircraft fuel efficiency, while having no effect on aircraft size. Given that these adjustments occur in response to the treatment of an emissions externality that is currently unaddressed, they represent efficient changes that move society closer to a social optimum.
Subjects:Emissions
airlines
JEL:Q50
L93
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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