An analysis of subsidies and operational efficiency for offshore island air routes
|關鍵字:||離島航線;補貼;福利分析;效率分析;隨機邊界法;Offshore island air routes;Subsidy;Welfare analysis;Efficiency analysis;Stochastic frontier|
The objective of subsidies for offshore island routes is to maintain the essential air service of these isolated areas. Nevertheless, it lacks an effective method to measure the economic benefit of increasing subsidies. Also, it is essential to improve the operations of offshore island routes. The purpose of this study is to investigate the impact of subsidies on the air market of offshore islands, and evaluate the subsidy benefit on both supply and demand sides. Furthermore, this study applies a stochastic frontier analysis (SFA) approach to evaluate operational efficiency of these air routes, and analyzes the determinants of efficiency. The results of the supply and demand model indicate that the price elasticities of demand of the routes without deficit subsidies are larger than those of the subsidized routes. The “Mini-Three-Links” policy increases the demand. On the supply side, ticket price is not sensitive to the number of passengers and is lower if there is an alternative sea mode. Welfare analysis reveals that awarding fare subsidy causes the deadweight loss but increases the consumer surplus. Considering the social equity and external benefit, fare subsidy still plays an important role in the air market of offshore islands. On the other hand, deficit subsidy affects the supply of the air market. Due to the price regulation, carriers may not provide services for some routes without deficit subsidy. Hence, these carriers rely on deficit subsidy in the current system. The results of stochastic frontier model suggest the intensity of competition has a negative impact on route efficiency, and air routes with deficit subsidy are more efficient than those without deficit subsidy. In addition, the efficiency increases as the distance of an air route increases while an alternative sea mode exists in the market. Routes with alternative modes are more efficient than those without alternative modes, given the same route distance.
|Appears in Collections:||Thesis|