Publication: Measuring the Technical Efficiency of Airports in Latin America
Loading...
Date
2010-06-01
ISSN
Published
2010-06-01
Author(s)
Editor(s)
Abstract
This paper studies the technical efficiency of airports in Latin America. The evolution of productive efficiency in the region has seldom been studied, mainly due to lack of publicly available data. Relying on a unique dataset that was obtained through questionnaires distributed to airport operators, the authors use Data Envelopment Analysis methods to compute an efficient production frontier and compare the technical efficiency of Latin American airports relative to airports around the world. In a second stage, they estimate a truncated regression to study the drivers of observed differences in airport efficiency. According to the results, institutional variables (private/public operation), the socioeconomic environment (level of gross domestic product), and airport characteristics (hub airport, share of commercial revenues) matter in explaining airport productive efficiency. Finally, the authors compute total factor productivity changes for Latin American airports for 1995-2007. The region has implemented a wide variety of private sector participation schemes for the operation of airports since the mid 1990s. The results show that private operators have not had higher rates of total factor productivity change.
Link to Data Set
Citation
“Perelman, Sergio; Serebrisky, Tomas. 2010. Measuring the Technical Efficiency of Airports in Latin America. Policy Research working paper ; no. WPS 5339. © World Bank. http://hdl.handle.net/10986/3824 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication The Asymmetric Bank Distress Amplifier of Recessions(Washington, DC: World Bank, 2025-07-11)One defining feature of financial crises, evident in U.S. and international data, is asymmetric bank distress—concentrated losses on a subset of banks. This paper proposes a model in which shocks to borrowers’ productivity dispersion lead to asymmetric bank losses. The framework exhibits a “bank distress amplifier,” exacerbating economic downturns by causing costly bank failures and raising uncertainty about the solvency of banks, thereby pushing banks to deleverage. Quantitative analysis shows that the bank distress amplifier doubles investment decline and increases the spread by 2.5 times during the Great Recession compared to a standard financial accelerator model. The mechanism helps explain how a seemingly small shock can sometimes trigger a large crisis.Publication From Tailwinds to Headwinds(Washington, DC: World Bank, 2025-07-10)The first quarter of the twenty-first century has been transformative for emerging market and developing economies (EMDEs). These economies now account for about 45 percent of global GDP, up from about 25 percent in 2000, a trend driven by robust collective growth in the three largest EMDEs—China, India, and Brazil (the EM3). Collectively, EMDEs have contributed about 60 percent of annual global growth since 2000, on average, double the share during the 1990s. Their ascendance was powered by swift global trade and financial integration, especially during the first decade of the century. Interdependence among these economies has also increased markedly. Today, nearly half of goods exports from EMDEs go to other EMDEs, compared to one-quarter in 2000. As cross-border linkages have strengthened, business cycles among EMDEs and between EMDEs and advanced economies have become more synchronized, and a distinct EMDE business cycle has emerged. Cross-border business cycle spillovers from the EM3 to other EMDEs are sizable, at about half of the magnitude of spillovers from the largest advanced economies (the United States, the euro area, and Japan). Yet EMDEs confront a host of headwinds at the turn of the second quarter of the century. Progress implementing structural reforms in many of these economies has stalled. Globally, protectionist measures and geopolitical fragmentation have risen sharply. High debt burdens, demographic shifts, and the rising costs of climate change weigh on economic prospects. A successful policy approach to accelerate growth and development should focus on boosting investment and productivity, navigating a difficult external environment, and enhancing macroeconomic stability.Publication Intergenerational Income Mobility around the World(Washington, DC: World Bank, 2025-07-09)This paper introduces a new global database with estimates of intergenerational income mobility for 87 countries, covering 84 percent of the world’s population. This marks a notable expansion of the cross-country evidence base on income mobility, particularly among low- and middle-income countries. The estimates indicate that the negative association between income mobility and inequality (known as the Great Gatsby Curve) continues to hold across this wider range of countries. The database also reveals a positive association between income mobility and national income per capita, suggesting that countries achieve higher levels of intergenerational mobility as they grow richer.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Airport Economics in Latin America and the Caribbean : Benchmarking, Regulation, and Pricing(World Bank, 2011-12-20)This report presents the findings of a first-ever, comprehensive study of how Latin America and the Caribbean (LAC) region airports have evolved during a notable period of transition in airport ownership. It is an unbiased, positive analysis of what happened, rather than a normative analysis of what should be done to reform and to attract private sector participation to the airport sector. It takes the first step to respond to the need for more conclusive information about the influence of airport ownership on economic performance. The report centers on the study of three dimensions of performance: productive efficiency, institutional setup for the governance of the sector, and financing. This multifaceted report uses a range of advanced quantitative and qualitative methods to assess the relationship between airport ownership and performance in the LAC region. After a comprehensive overview, chapters 1 and 2 provide the necessary background for the air transport sector and the evolution of private sector participation and investment in airport infrastructure. In chapter 3, questionnaires submitted to airport operators and regulators led to the creation of the unique data sets, which were first used to compare performance across 14 partial performance indicators, and next used to develop aggregate measures of efficiency necessary for the benchmarking exercise. In chapter 4, a qualitative study of the relationship between type of regulating agency (independent or government-led) and transparency, accountability, and bureaucracy provides insight into how recent reforms have also affected the quality of regulatory governance. Chapter 5 provides an in-depth analysis of the evolution of tariff structures in the region as compared to a sample of international airports. Several important topics were not included in this report but should be the focus of future research. In particular, the evolution of the quality of services in airports deserves greater attention, as airports are increasingly becoming business centers and key gateways for trade competitiveness. The other main topic that requires detailed practical research is climate change and its relationship with the airport sector.Publication Air Transport : Challenges to Growth(World Bank, 2009-06-01)The air transport market in Sub-Saharan Africa presents a strong dichotomy. In Southern and East Africa the market is growing: three strong hubs and three major African carriers dominate international and domestic markets, which are becoming increasingly concentrated. In contrast, in Central and West Africa the sector is stagnating, with the vacuum created by the collapse of Cote d'Ivoire and the demise of several regional airlines, including Air Afrique, still unfilled. Throughout, there are many unviable small state-owned operations that depend on subsidies and have a monopoly over the domestic market. There are also some promising signs: growth in air traffic has been buoyant, the number of routes and the size of aircraft are being adapted to the market, and a number of large carriers are viable and expanding. But in spite of this, overall connectivity has been declining. As oil prices rise, the role of air transportation will be looked at even more critically. Africa is a poor continent, and some countries face the potential of further isolation as the cost of flying increases. At a time when Africa's infrastructure requirements are being widely debated, a more complete inventory of air transport capabilities is sought. This report will focus on industry organization within Africa; overall accessibility; and the quality of oversight and infrastructure installations countrywide and at selected airports with various capacities. Beyond data collected from questionnaires sent directly to the civil aviation authorities (CAAs) in each country, this report relies on data collected through a variety of other sources, especially from the providers of flight schedules to global reservation systems, for an independent analysis of trends.Publication ECOWAS's Infrastructure : A Regional Perspective(2011-12-01)Infrastructure improvements boosted growth in the Economic Community of West African States (ECOWAS) by one percentage point per capita per year during 1995-2005, primarily thanks to growth in information and communication technology. Deficient power infrastructure held growth back by 0.1 percent. Raising the region's infrastructure to the level of Mauritius could boost growth by 5 percentage points. Overall, infrastructure in the 15 ECOWAS countries ranks consistently behind southern Africa across many indicators. However, there is parity in access to household services -- water, sanitation, and power. ECOWAS has a well-developed regional road network, though sea corridors and ports need attention. Surface transport is expensive and slow, owing to cartelization, restrictive regulations, and delays. There is no regional rail network. Air transport has improved despite the lack of a strong hub-and-spoke structure. Safety remains a concern. Electrical power, the most expensive and least reliable in Africa, reaches 50 percent of the population but meets just 30 percent of demand. Regional power trading would bring substantial benefits if Guinea could become a hydropower exporter. Prices for critical ICT services are relatively high. Recent panregional initiatives have improved roaming. New projects are underway to provide access and improved services to unconnected countries. Completing and maintaining ECOWAS's infrastructure will require sustained spending of $1.5 billion annually for a decade, with one-third going to power. Although the necessary spending is only 1 percent of regional GDP, some countries' share is between 5 and 25 percent of national GDP. Clearly, external assistance will be needed.Publication ECCAS's Infrastructure : A Regional Perspective(2011-10-01)Sound infrastructure is fundamental for growth across the Economic Community of Central African States (ECCAS). During 1995-2005, improvements in infrastructure boosted growth in Central Africa by 1 percentage point per capita annually, primarily due to the introduction and expansion of mobile telephony. Improved roads also made a small contribution. Conversely, inadequate power deterred growth to a greater degree than elsewhere in Africa. ECCAS must address a complex set of challenges. Economic activity takes place in isolated pockets separated by vast distances. Two countries are landlocked and dependent on regional corridors; seven countries have populations of under 10 million; and eight have economies that are smaller than $10 billion/year. This difficult economic geography demands a regional approach to developing infrastructure. Yet Central Africa's infrastructure has the poorest performance record in all of Africa on most aggregate indicators. Transportation is slow and the most expensive in Sub-Saharan Africa, with poor road conditions, border delays, port delays, time-consuming administrative processes, no integrated railway network, and inefficient air transport. The ICT backbone is still in its early stages; access rates are low and the prices of critical services are the highest in Africa. ECCAS has the least-developed power sector on the continent despite significant hydropower resources. If Central Africa's infrastructure could be improved to the level of Mauritius, regional growth performance would be boosted by some 5 percentage points, with power making the strongest contribution. The cost of such an improvement is estimated at $1.8 billion/year for a decade and will require external assistance.Publication Market Power : Airports - Vertical Integration between Airports and Airlines(World Bank, Washington, DC, 2003-03)In the late 1980s and the 1990s many countries privatized airports or concessioned their operation. The United Kingdom began the trend, followed by other countries adopting new forms of infrastructure ownership and management. To control infrastructure licensing and the "natural monopoly" characteristics of some airport services, governments developed regulatory policies for airport systems. The operation of an airport creates incentives to transfer the airport's market power to the air transport market. If the airport market is regulated but the airport operator is allowed to control at least one airline, those incentives can give rise to anticompetitive practices aimed at displacing competing airlines. When the regulatory framework for airports lacks explicit rules about such vertical integration, that can have consequences for competition in the air transport market. Australia and Chile, for example, have an explicit prohibition on vertical integration. By contrast, Argentina has no restrictions on vertical integration leaving it to the antitrust agency to decide whether to approve or reject a vertical merger. Airlines provide air transport services by combining aircraft, personnel, airport services, and other inputs. Airports supply a series of services to air transport companies and to passengers. Aeronautical services (rescue, security, firefighting, infrastructure supply, runway and taxiway maintenance). Aeronautical-related commercial services (catering; supply of fuel and lubricants; baggage, passenger, and aircraft assistance). Commercial services (banks, hotels, restaurants, car rental, car parking, retail shops, duty-free shops).
Users also downloaded
Showing related downloaded files
Publication Governance Matters VIII : Aggregate and Individual Governance Indicators 1996–2008(2009-06-01)This paper reports on the 2009 update of the Worldwide Governance Indicators (WGI) research project, covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2008: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. These aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance, taken from 35 data sources provided by 33 different organizations. The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. The authors also explicitly report the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. They find that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons as well as monitoring progress over time. The aggregate indicators, together with the disaggregated underlying indicators, are available at www.govindicators.org.Publication Breaking the Conflict Trap : Civil War and Development Policy(Washington, DC: World Bank and Oxford University Press, 2003)Most wars are now civil wars. Even though international wars attract enormous global attention, they have become infrequent and brief. Civil wars usually attract less attention, but they have become increasingly common and typically go on for years. This report argues that civil war is now an important issue for development. War retards development, but conversely, development retards war. This double causation gives rise to virtuous and vicious circles. Where development succeeds, countries become progressively safer from violent conflict, making subsequent development easier. Where development fails, countries are at high risk of becoming caught in a conflict trap in which war wrecks the economy and increases the risk of further war. The global incidence of civil war is high because the international community has done little to avert it. Inertia is rooted in two beliefs: that we can safely 'let them fight it out among themselves' and that 'nothing can be done' because civil war is driven by ancestral ethnic and religious hatreds. The purpose of this report is to challenge these beliefs.Publication Design Thinking for Social Innovation(2010-07)Designers have traditionally focused on enchancing the look and functionality of products.Publication Governance Matters IV : Governance Indicators for 1996-2004(World Bank, Washington, DC, 2005-06)The authors present the latest update of their aggregate governance indicators, together with new analysis of several issues related to the use of these measures. The governance indicators measure the following six dimensions of governance: (1) voice and accountability; (2) political instability and violence; (3) government effectiveness; (4) regulatory quality; (5) rule of law, and (6) control of corruption. They cover 209 countries and territories for 1996, 1998, 2000, 2002, and 2004. They are based on several hundred individual variables measuring perceptions of governance, drawn from 37 separate data sources constructed by 31 organizations. The authors present estimates of the six dimensions of governance for each period, as well as margins of error capturing the range of likely values for each country. These margins of error are not unique to perceptions-based measures of governance, but are an important feature of all efforts to measure governance, including objective indicators. In fact, the authors give examples of how individual objective measures provide an incomplete picture of even the quite particular dimensions of governance that they are intended to measure. The authors also analyze in detail changes over time in their estimates of governance; provide a framework for assessing the statistical significance of changes in governance; and suggest a simple rule of thumb for identifying statistically significant changes in country governance over time. The ability to identify significant changes in governance over time is much higher for aggregate indicators than for any individual indicator. While the authors find that the quality of governance in a number of countries has changed significantly (in both directions), they also provide evidence suggesting that there are no trends, for better or worse, in global averages of governance. Finally, they interpret the strong observed correlation between income and governance, and argue against recent efforts to apply a discount to governance performance in low-income countries.Publication Government Matters III : Governance Indicators for 1996-2002(World Bank, Washington, DC, 2003-08)The authors present estimates of six dimensions of governance covering 199 countries and territories for four time periods: 1996, 1998, 2000, and 2002. These indicators are based on several hundred individual variables measuring perceptions of governance, drawn from 25 separate data sources constructed by 18 different organizations. The authors assign these individual measures of governance to categories capturing key dimensions of governance and use an unobserved components model to construct six aggregate governance indicators in each of the four periods. They present the point estimates of the dimensions of governance as well as the margins of errors for each country for the four periods. The governance indicators reported here are an update and expansion of previous research work on indicators initiated in 1998 (Kaufmann, Kraay, and Zoido-Lobat 1999a,b and 2002). The authors also address various methodological issues, including the interpretation and use of the data given the estimated margins of errors.