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Diversity, Innovation and Clusters
Spatial Perspectives
Edited by Iréne Bernhard, Urban Gråsjö and Charlie Karlsson
Regions and Innovation Policies in Europe
Learning from the Margins
Edited by Manuel González-López and Bjørn T. Asheim
Edited by Philip McCann and Tim Vorley
From Innovation to Entrepreneurship
Connectivity-based Regional Development
Yasuyuki Motoyama
Edited by John R. Bryson, Lauren Andres and Rachel Mulhall
A Research Agenda for Regeneration Economies
Reading City-Regions
Edited by John R. Bryson, Lauren Andres and Rachel Mulhall
Edited by Urban Gråsjö, Charlie Karlsson and Iréne Bernhard
Yulai Wan and Anming Zhang
An airport’s capacity is in general indivisible and hence cannot be adjusted continuously, while the demand for airport services tends to increase over time as with the growing economy. Consequently, when new runways are completed, they are likely under-utilized, but as traffic increases over time, congestion occurs. It may therefore be optimal to vary airport charges over time by keeping charges low at the early stage of the infrastructure life cycle and raising charges towards the end of its life cycle. This chapter discusses the benefits of time-dependent charges by considering the airport’s economic impacts as well as the changing economic environment, such as the unemployment level. The analysis is based on a case study of Hong Kong International Airport. The authors attempt to demonstrate quantitatively the above airport pricing strategy, and to further show how to conduct a real-case cost-benefit analysis of airport pricing for policy application.