A stochastic frontier analysis to estimate the relative efficiency of Spanish airports

Abstract

There exists a common belief among researchers and regional policy makers that the actual central system of Aeropuertos Españoles y Navegación Aérea (AENA) should be changed to one more decentralized where airport managers could have more autonomy. The main objective of this article is to evaluate the efficiency of the Spanish airports using Markov chain Monte Carlo (MCMC) simulation to estimate a stochastic frontier analysis (SFA) model. Our results show the existence of a significant level of inefficiency in airport operations. Additionally, we provide efficient marginal cost estimates for each airport which also cast some doubts about the current pricing practices.