Subject: Yushuo Yang PhD Defense
Candidate: Yushuo Yang
Dissertation Title: “Pre- and Post-COVID-19 Analyses of Short-Run Airport Costs in the U.S.”
Abstract: Airports play an essential role in passenger and cargo transportation as well as are a driver for job creation and GDP growth. A better understanding of airport cost structures helps airport managers and policymakers better allocate their limited resources and formulate policies efficiently, respectively. This dissertation conducts short-term multi-output cost analyses for 50 medium and large U.S. airports. Employing a multi-product translog cost function methodology, the dissertation addresses three research questions: what are the effects of negative output attributes on short-run airport cost structures; what impact did COVID-19 have on airport short-run operating costs; and for aircraft departures, how does the short-run marginal social cost differ from marginal private costs. Based on 2012 – 2019 data, the first essay estimates a translog cost function incorporating three positive outputs (departures, workload, and non-aeronautical revenue) and three negative output attributes (delay, congestion, and air pollution). The results find that delay and congestion have statistically significant positive effects on airport total operating costs. The cost analysis without negative output attributes produces unreliable estimates of production properties compared to the cost analysis with negative output attributes. Extending the data to include two COVID-19 years, 2020 and 2021, the second essay analyzes the impacts of COVID-19 and COVID-19 related policies on airport short-term costs. The essay also decomposes the average cost differentials per departure between pre-COVID-19 and COVID-19 periods. The results indicate that COVID-19 (cases and deaths) and associated policies (face mask and COVID-19 vaccine mandates) significantly and positively impact the total operating costs. COVID-19 cases and the time/technical efficiency effect are the two most influential factors for the average cost differentials. The third essay focuses on aircraft departures and calculates a measure of marginal social cost that includes negative externalities (delay and congestion). The essay analyzes whether the current landing fees cover marginal departure social costs. The results find that, on average, current landing fees just cover the marginal private costs but are far less than the marginal social costs per departure. This strongly suggests that current airport landing fees do not currently internalize the negative externalities, leading to inefficient pricing from a social perspective. Each of these essays includes sub-sample analyses between large and medium hubs, as well as between cargo and non-cargo airports. The results find differences between the different types of airports in each of the analyses. In summary, the dissertation uniquely contributes to existing knowledge on the impacts of negative output attributes, COVID-19, and the extent to which existing landing fees fall short of the marginal social costs of airport departures.
Committee:
Patrick McCarthy (advisor), Professor Emeritus, Georgia Institute of Technology
Justin Burkett, Associate Professor, Georgia Institute of Technology
Shatakshee Dhongde, Associate Professor, Georgia Institute of Technology
Olga Shemyakina, Associate Professor, Georgia Institute of Technology
Karen Yan, Assistant Professor, Georgia Institute of Technology
Chun-Yu Ho (external member), Associate Professor, University at Albany, State University of New York
Location: In person, Old Civil Engineering Building Room 204
Time: July 11th, 2023, 10 am – 12 pm EST