Related Work Academic literature on the impact of the pricing method on airport performance and social welfare is rather thin and not very conclusive. The most relevant study on the proposed research project is Oum, Zhang and Zhang (2004). This study concludes that airports using a clearing method (even in double till) appear to be more efficient (in terms of overall factor productivity) than those operated under the residual regime. At the same time, Czerny (2006) argues that the method of setting residual rates will be linked to an increase in overall well-being at unsaturated regulated airports, with most U.S. airports fall into this category. Yang and Zhang (2011) show that Czerny`s result for saturated airports might not be able to think. There is also little literature on the determinants of airport revenues, including the potential effects of the interest rate-setting method. Bilotkach, Clougherty, Mueller and Zhang show (shortly) that European airports operating below residual prices have lower average take-off and landing charges than airports under the clearing method. While Van Dender (2006) examines, in a sample of U.S. airports, the determinants of a number of airport performance indicators, including aviation and non-aeronautical revenues; the possible effects of the interest rate-setting method are not taken into account. At the same time, previous studies (for example.
B Czerny, 2006) suggested that the residual methodology may be more favourable to optimizing non-aeronautical revenues, given that airports will be encouraged to reduce aviation charges in order to increase their non-aeronautical revenues. Overall, the impact of the fare-setting method on airport financial performance and revenue optimization has not been systematically discussed by airlines. This research will provide the first in-depth study of the issue. Emergency/Priority We believe that this project is a priority for two reasons. First, a brief review of existing literature indicates that the current trend of U.S. airports moving to a compensatory or hybrid rate-setting method could lead to less overall prosperity, while airports could be more efficient.