ENVIRONMENT

The Regional Impact of Airports: How can we measure it?

In most countries, the majority of airports depend on public funding. This is usually granted either for expansion projects or for the coverage of operational losses of airports. When public money is allocated to airports, it is often justified with the actual or alleged importance of airports for promoting regional wealth and development. Local politicians, airport managers and other advocates of regional aviation habitually justify their intentions by referring to studies that demonstrate the importance of the particular airport for the regional economy. There does not seem to be a clear consensus, however, on which methodology is suitable for the specific task of measuring the economic impact of an airport. A number of approaches are used in order to quantify the effects, based on input-output analysis (IOA), cost-benefit analysis (CBA) or econometric estimations. However, the assumptions and limitations of the methodologies are sometimes not thoroughly considered so that invalid conclusions are drawn from the results. In this paper, we therefore analyze the strengths and weaknesses of the three major approaches and their applicability to the quantification of the economic impact of airports.1 In section II, we give a brief overview of the different effects that an airport generates within its region, both negative and positive. In section III, we take a closer look at the spectrum of approaches, presenting their backgrounds, their application in practice and their merits as well as their potential weaknesses. Finally, section IV concludes this paper.
by: Dr. Robert Malina and Christoph Wollersheim

II. The role of airports for the regional economy Airports can have a signicant impact on regions. There are positive as well as negative effects on airport users, regional economy, adjacent communities and the environment. The following gure (Figure 1: Social impacts of airports) structures the various bundles of effects produced by airports. Private costs occur in the prot and loss statement of airport operators. They include the planning and construction costs of capital projects as well as operating costs and can easily be determined. It is more difcult to identify external costs, since these occur outside the market and also impact non-users. External costs are mainly (but not limited to) environmental impacts of airports, which can be divided into noise, emissions, water pollution and use, waste and energy management, and impacts on wildlife, heritage and landscape.2

Private benets of airports are reected mainly by lower transportation and travel costs for companies and individuals within the airport region. Lower transportation costs give access to new markets, both product and labor markets. This can improve the international division of labor, and hence increase companies productivity. Whereas private benets accrue to users of air transport, external benets also accrue to non-users of the particular airport. The marketplace is generally well-suited for absorbing benets through market prices (e.g. ticket prices, land prices), however, some benets might remain outside the market mechanism.3 Generally, airports are an important factor in attracting inward investment since they can offer quick and convenient access to air services and goods to businesses. Surely, airports are only one of a number of factors in locational investment decisions, but a nearby airport with good services can at least help to push the region on a shortlist of potential search areas. 4

e-zine edition 44

Figure 1: Social impacts of airports g p p

III. Measuring the regional impact of airports 1. Input-output analysis Input-output analysis is probably the most common approach for analyzing an airports impact on the regional economy, whether related to developing or expanding airports or to current airport operations. Since the 1980s, a multitude of studies have been carried out using IOA .5 Input-output studies use a Keynesian demand model based on input-output tables. They estimate the effects on value added, employment and income that result from economic activities at the airport.6 IOA does not only take into account direct effects that accrue from economic operation on the airport site, but also indirect effects that follow from demand generated by the enterprises at the airport for intermediate and capital goods and induced effects, which are a consequence of spending by employees of companies at the airport or of producers of intermediate goods. Evaluation of the approach IOA can give qualied insights regarding the overall and sectoral demand effects that an airport generates.7 Therefore, IOA is a sound means for measuring the economic impact of airport infrastructure on regional value added, employment and income. Information on the sectoral distribution of the effects can provide valuable information to policymakers as to which parts of the local economy benet the most from the economic activity at the airport. Data requirements for IOA can be fullled rather easily compared to other approaches. Information on employment, investment and intermediate good demand can be obtained from the companies at the airport. Since in most countries input-output tables are publicly provided, the approach can be applied rather easily and inexpensively; the results are easy to understand for the public.8 There are efforts to harmonies the national accounting standards, which would allow more accurate comparisons of results across countries. One might, however, get the impression that the relative ease of data collection and application of the approach likewise is one of its weaknesses: It tends to lead to a ubiquitous application of input-output analysis on issues it is not suited for. This has lead to a general mistrust in the results of IOA, which is not justied. It is not the results of the IOA that gives reason for distrust but the suppression or neglect of the models limitations.9

Probably the most severe misuse of input-output analysis is its application to the evaluation of investment decisions, such as the appraisal of pros and cons of runway enlargements or terminal extensions. At one of Europes busiest hubs, Frankfurt airport, for example, the decision to build a new, fourth runway was decisively inuenced by an input-output analysis that predicted the creation of 57,000 jobs if the new runway was built.10 Using IOA for project appraisal and investment decisions has several shortcomings: Treatment of private costs: In input-output models, a rise in demand leads to more value added, employment and income for the economy. As costs (e.g. runway and terminal construction and operation costs) are treated as demand, the effects the model generates increase when costs increase. Therefore, the higher the inefciency of an airport the higher the economic impact for the regional economy will be.11 Treatment of external costs: It is undisputable that air transportation does not only generate benets but also technological external costs, which are not incorporated into the marketplace. While not directly generated by the airport itself, these negative effects can at least partially be attributed to its presence, as airport infrastructure is an essential intermediate good for air trafc to and from a region.12 Moreover, airport expansion projects aim at increasing air trafc, which in turn increases external costs. While external costs are not incorporated into market prices, they are of course relevant for policymakers, who aim at maximizing or improving social welfare. IOA cannot consider external costs, as it is part of the national accounting systems, which do not account for these costs. Basing themselves on the results of input-output analysis, policymakers might erroneously prefer a project that has fractionally higher values according to IOA but much higher environmental costs compared to a different project. Treatment of private and external benets: Air transportation has various benets for its users - such as travel time and cost savings and access to new markets - but also for non-users: Adjacent communities might benet from higher locational attractiveness, giving the region a competitive advantage over other regions, leading to higher economic growth and higher employment. IOA is able to partially incorporate benets of air transportation. Employment, value added and income at the airport site (direct effects) are results of users demand for products and services at the airport. The demand from companies at the airport 2

for capital and intermediate goods (generating indirect effects) is likewise attributable to users demand and benet: Without passengers and freight forwarders beneting from and therefore using the airport, there would be no demand from companies at the airport site for intermediate or capital goods as there would be no economic activity at all at the airport. However, direct and indirect effects do not incorporate all benets: Travel time and cost savings are reected by passenger or cargo revenues of the airlines.13 IOA does not fully cater for these benets, as it only accounts for expenditures of the airlines at the airport (e.g. for ground-handling staff, fuel, ofce space) and not for revenues. Besides, effects on the regional economy are measured only as buyer-supplier relationships, in which the companies at the airport order goods and services from the supplier. Potential higher locational attractiveness or economic growth cannot be integrated into the analysis. 2. Econometric Analysis In principle, econometric estimations are suitable for a broad range of various research questions. Some studies employ econometrics in order to test negative impact of airports on the surrounding region.14 There are a number of econometric studies on the positive impact of (transport) infrastructure in general starting with the seminal papers of Mera (1973) and Aschauer (1989).15 However, there are still only a few examples of the use of regression analysis techniques for measuring the positive inuence of airports on the regional economy. Generally, regression analyses observe the relationship between one dependent and one (simple regression) or several (multiple regression) independent variables. When examining the economic impact of airports for regional economies, the dependent variable is supposed to represent a good indicator for economic prosperity. Prosperity can be reected by employment, population growth or regional GDP. Most studies test several of these dependent variables in consecutive analyses. Independent variables are chosen according to their inuence on economic prosperity.
Table 1: Overview of econometric airport impact studies Author (-s) / year
Brueckner (1982)

Table 1 gives an overview on studies employing econometric approaches in order to quantify the economic impact of airports. Beside Brueckner (1982), all studies have found highly signicant relationships between airport activity and economic performance. Evaluation of the approach: Econometric macrostudies offer interesting insights into general relationships which are universally valid for the entire airport infrastructure of particular countries. The results of such studies indicate elasticities, which show the variation of employment, population growth or regional GDP against an increase in regional air trafc. Since the necessary data is easy to collect via the respective statistical ofces, the costs for such econometric estimations are very low. Furthermore, econometric estimations enable researchers to carry out a multitude of various different analyses for a wide range of research questions. Applied on the research question as to whether airports and air trafc produce benets for regions, regression models provide useful information. However, this instrument is of lesser use for the application on individual airports. Politicians, bureaucrats or airport managers who commission airport studies usually require specic estimations for the economic impact of their particular airports or planned expansion projects. Some econometric studies try to apply the estimated elasticities on individual airport projects as well.16 However, one should bear in mind that econometric estimations have a rather global character. With applying only universally valid coefcients for updating or predicting economic impacts of particular airports, one does not consider regional characteristics. Differences in productivity and wages between different regions of one country are neglected. For instance Purcell (2007) estimates for St. Thomas Municipal Airport (located in the Canadian Province of Ontario, close to Lake Erie) for the year 2005 a total of 65.8 person years of direct, indirect and induced employment and gross revenues of CAD 12 million.17

Field of research and num- Dependent Variable ber of observations (-s)

Sample includes 75 small and medium sized US metropolitan areas Employment growth

Significant independent variables

Unknown

Benell / Prentice (1992)

Sample includes 44 Canadian airport regions, for which input-output analysis had been carried out Sample includes all 321 US metropolitan statistical areas and 56 airports which are defined as hubs by the FAA Sample includes all 48 continental US-states and data from 1982-1996. Investigates the influence of airports on manufacturing costs 2SLS and OLS estimation of 91 US metropolitan areas to examine the link between airline traffic and employment OLS and 2SLS regressions of 83 US metropolitan areas

Employment, airport revenue

Passenger traffic, wealth, number of large aircraft, maintenance base

Button / Lall / Stough / Trice (1999) Cohen / Paul (2002)

High technology employment

Hub airport, Fortune 500 companies, highway density, defense expenditure

Total Manufacturing Costs

Airport infrastructure stock, highway stock, private capital, prices for production and non-production labor, prices for materials

Brueckner (2003)

Passenger traffic, employment, goods related employment and servicerelated employment Population growth, employment growth

Population, passenger traffic, share of people under the age of 14 or over 65, influence of unions, location in the rust belt, percentage of population with a college degree, taxes Boardings per capita, workforce in manufacturing and FIRE jobs, state capital, population with high school and college degree, cooling and heating degree days, various tax rates, influence of unions, average commute time WLU, population density, employees in the tertiary sector, university students, access time to high level centers, tax rates, location in the former socialistic part of Germany, earnings in the secondary sector, share of people of the age of over 65 and under 18 years

Green (2006)

Wollersheim / von Blanckenburg (2009)

OLS Panel analysis of 61 German airport regions over 4 years

Unemployment rate, GDP/capita

However, this estimate is carried out by means of an econometric model which is based on Benell / Prentice (1993). However, such an estimate cannot reach the accuracy of an IOA.18 Another shortcoming of regression analyses is that the direction of causality is often not quite clear. Green (2006) states: While good airport service could lead to economic success, economic success could lead to good airport service.19 Some of the abovementioned studies try to solve this problem by employing the Granger causality test20 or the 2SLS method to identify instruments that also inuence regional air trafc. However, since the correlation between regional wealth and air trafc is based on interdependency, the accuracy of elasticities gathered with regression analyses might be arguable. The degree, to which costs are considered, depends on the research question of the particular study. With regard to the summarized papers in table 1, Cohen and Paul (1998) are the only ones who focus on private costs. By means of adequate research questions, external costs can be measured by means of econometric estimations as well.21 Their results would again be universally valid and can be used in cost-benet analyses. However, decisions on particular airport projects should not be based exclusively on these gures, since external costs, such as noise or engine emissions depend on local conditions. Nevertheless, the results from regression models can provide useful information on parameter values for cost-benet analyses such as average noise costs per decibel or average water pollution costs per passenger. The vector of quantities, however, has to be determined case-by-case. 3. Cost-benefit analysis Cost-benet analysis is a method which aims at quantifying the net economic surplus of a publicly funded project, which is the difference between benets and costs. Whereas project evaluation in the private sector is only concerned with private benets (in the form of revenues) and costs, CBA comprises all effects, private and external. CBA is used worldwide for the assessment of publicly funded transport infrastructure projects. However, at least in Europe, there is a striking difference in application between the individual transport modes. Whereas 25 European countries22 apply CBA for road projects and 21 for rail projects, only 9 use CBA for airport infrastructure investments.23 Contrary to the US, where cost-benet analysis is mandatory for the evaluation of airport expansion projects, authorities in many European countries do not require the implementation of CBA.24 In Germany, for example, all major road, rail and inland waterway investments must be assessed using CBA, but for airport projects CBA is optional and is, probably because of the high costs involved, not employed at all.25 In the UK, however, airport expansion projects are assessed by means of CBA. The decision whether to build a new runway at Heathrow airport, for example, will be based on the results of a cost benet study.26 The European Commission explicitly stipulates that all projects partly nanced by European funds should be evaluated by CBA.27
Figure 2: Use of CBA in Europe by transport mode in 2004 Source: Odgaard et al. (2005), p. 14. Notes: *Mode only relevant for 20 countries.

Evaluation of the approach: Cost-benet analyses are not needed, when policymakers are just trying to get an impression of the overall importance of an existing airport for the regional economy. For this purpose, the implementation of an input-output-study or even the use of general results from macrostudies is sufcient. However, this does not hold true for the evaluation of new investments in airports, regardless if it is about securing the status quo or about enlargements. CBA is the only approach that enables policymakers to weigh up the full social benets and costs of a proposed project, and therefore it is the only approach that is able to give sound information whether public money should be spent or not. Due to the inclusion of all benets and costs, CBA is superior to other methodologies such as input-output analysis in the context of project appraisal. So why can one identify such a large discrepancy between the theoretical supremacy of CBA and its practical implementation for airport projects? A possible explanation might be found in the complexity of the approach and the costs associated with it. Critical issues for conducting CBA involve the identication of the relevant effects, their measurement, forecasting and monetization, the prevention of double or triple counting or the determination of the discount rate.28 Compared with other approaches, CBA needs much more specic information, more time and more resources. Especially smaller countries or regional entities might try to avoid the high implementation costs of CBA and rather rely on input-output analysis, even if the results are only pseudo-accurate. However, the argument of prohibitive high implementation costs is a weak one: First of all, CBA has been used successfully for many years for other transport modes. Quantifying the costs and benets of a major road or rail infrastructure investment is by no means easier and therefore cheaper than quantifying the effects for an airport. Secondly, the welfare loss that arises when an inferior project is chosen based on a study that relies on an unsuitable methodology will in most cases be higher than the cost savings

due to the relatively ease of study execution given the fact that overall planning costs are only a fraction of the total investment costs. Thirdly, there are a number of guidelines both on the national and the supranational level, offering standardized appraisal techniques or even parameter values for benets and costs so that only the vector of quantities has to be determined on a case-by-case basis.29 IV. Conclusion Decision-makers often have only a vague idea as to which approach should be used for analyzing the role of an airport for promoting regional wealth and development. Input-output studies are comparatively cheap to conduct and give a good overview of employment, income and value added that is created due to the economic activity of the companies at the airport site. However, they are not suited for investment decisions. Regression models provide interesting and universally valid information about the relationship between regional air trafc and economic performance as well as between regional air trafc and external costs. However, one should be careful in predicting the effects of particular airport expansion projects exclusively with the results of econometric estimations as they can only give rough ideas about the actual regional effects. Cost-benet analyses are essential for airport project evaluation, as it is the only methodology that is capable of measuring the full social effects of a proposed investment, including efciency aspects. Experiences from other transport modes and countries that employ CBA for airports show that the instrument can help to improve policy decisions. Countries that are not yet using CBA should thus develop and apply appropriate assessment tools. This could signicantly contribute to the avoidance of misinvestments and the increase of social welfare. About the authors:
Dr Robert Malina is the Managing Director of the Institute of Transport Economics at the University of Muenster. Beside airports, his current elds of research include the airline market, road infrastructure and inland waterway shipping. Robert holds lectures at Muenster University, Bonn University and the Warsaw School of Economics. To contact Robert Malina: Robert.malina@wiwi.uni-muenster.de. Christoph Wollersheim holds a doctoral degree from the University of Muenster. He is currently a Postdoctoral Fellow at MIT, where his research focuses on the mitigation of aviation-related negative externalities. Christoph is also an external lecturer at the International School of Management in Dortmund.

References
Adler, H.A. (1987), Economic Appraisal of Transport Projects, Baltimore. Aschauer, D. (1989), Is public expenditure productive?, Journal of Monetary Economics, vol. 23, no 2, pp. 177-200. Batey, P.W.J, Madden, M. and Scholeeld, G. (1993), Socioeconomic impact assessment of large-scale projects using inputoutput analysis: A case study of an airport, Regional Studies, vol. 27, pp. 179-191. Benell, D.W. and Prentice, B.E. (1993), A regression model for predicting the economic impacts of Canadian airports, Logistics and Transportation Review, vol. 29, no. 2, pp. 139-158. Bhatta, S. D. and M. Drennan (2003), The Economic Benets of Public investment in Transportation: A Review of Recent Literature, Journal of Planning Education and Research 22 (3): 288296.

Bickel, P. et al. (2006), HEATCO Deliverable 3: Proposal for Harmonised Guidelines. Brueckner, J.K. (1982), Metropolitan airline trafc: determinants and effects on local employment growth, unpublished paper, University of Illinois at Urbana-Champaign. Brueckner, J.K. (2003), Airline trafc and urban economic development, Urban Studies, vol. 40, no. 8, pp. 1455-1469. Bulwien, H. et al. (1999), Einkommens- und Beschftigungseffekte des Flughafens Frankfurt/Main, Frankfurt. [Income and employment effects of Frankfurt/Main Airport] Button, K., Lall, S., Stough, R., and Trice, M. (1999), High-technology employment and hub airports, Journal of Air Transport Management, vol. 5, pp. 53-59. Cohen, J.P. and Paul, C.J. (2002), Airport Infrastructure Spillovers in a Hub and Spoke System, Department of Agricultural and Resource Economics, University of California Davis, Working Paper no. 01-011. Department for Transport (2009): Adding Capacity at Heathrow Airport: Impact Assessment, 15 January 2009. London. European Commission (2002), Guide to cost-benet analysis on investment projects, prepared for Evaluation unit, DG Regional Policy, Brussels. Federal Aviation Administration (1999), Airport Benet-Cost Analysis Guidance. Forsyth, P. (2006), Estimating the Costs and Benets of Regional Airport Subsidies: A Computable General Equilibrium Approach, paper presented at German Aviation Research Society workshop, June 29 July 1 2006, Amsterdam. Graham, A. (2001), Managing Airports, Oxford, 2001. Granger, C. (1969), Investigating causal relations by econometric models and cross-spectral methods, Econometrica, vol. 37, no. 2, pp. 424-438. Green, R. K. (2006), Airports and Economic Development, Department of Finance, School of Business, The George Washington University, Washington, D.C, 2006. Heuer, K., Klophaus, R. and Schaper, T. (2005), Regionalkonomische Auswirkungen des Flughafens Frankfurt-Hahn fr den Betrachtungszeitraum 2003 2015, Wissenschaftliche Forschungsstudie im Auftrag der Flughafen Frankfurt-Hahn GmbH, Birkenfeld. [The regional impact of Frankfurt-Hahn airport in the years 2003 to 2015] Jorge, J.-D. and de Rus, G. (2004), Cost-benet analysis of investments in airport infrastructure: a practical approach, Journal of Air Transport Management, vol. 10, pp. 311-326. Klophaus, J. (2008), The Impact of Additional Passengers on Airport Employment - The Case of German Airports, Journal of Airport Management, vol. 2, pp. 265-274. Lu, C. and Morrell, P. (2006), Determination and applications of environmental costs at different sized airports aircraft noise and engine emissions, Transportation, vol. 33, no. 1, pp. 45-61. Macki, P. and Preston, J. (1998), Twenty-one sources of error and bias in transport infrastructure appraisal, Transport Policy, vol. 5, pp. 1-7. Malina, R., Peltzer, S. and Wollersheim, C. (2006), Die regionalwirtschaftlichen Effekte des Dortmund Airport, Motor fr Industrie, Handel, Dienstleistung und Beschftigung, hrsg. von der Industrie und Handelskammer zu Dortmund, Dortmund, [The regional economic impact of Dortmund Airport] Malina, R., Schwab, M. and Wollersheim, C. (2008): Using a contingent-valuation approach for evaluating the benets of airports for regional economies, proceedings of the 12th Annual World Conference of the Air Transport Research Society, July 6 - 10 2008, Athens. Mera, K. (1973), Regional production functions and Social Over-

head Capital: An analysis of the Japanese case, Regional and Urban Economics, vol. 3, pp. 157-185. Mishan, E.J. (1988), Cost benet analysis, Boston, Sydney, Wellington. Mnzenmaier, W. (2001), Political consultation with the help of Input-Output Analysis - the example of Baden-Wrttemberg, W. Pfhler (ed.), Regional Input-Output Analysis, Baden-Baden, pp. 89-107. Nash. C. (1993), Cost-benet analysis of transport projects, A. Williams, F. Giardina (ed.), Efciency in the public sector, The Theory and Practice of Cost-benet analysis, Cheltenham, pp. 83-105. Niemeier, H.-M. (2001), On the use and abuse of Impact Analysis for airports: a critical view from the perspective of regional policy, W. Pfhler (ed.), Regional Input-Output Analysis, BadenBaden, pp. 201-220. Odgaard, T., Kelly, C. and Laird, J. (2005), HEATCO Work Package 3: current practice in project appraisal in Europe, Deliverable 1 / Volume 1 (main text). Pfhler, W., U. Hofmann and Bnte, W. (1996), Does Extra Public Infrastructure Matter? An Appraisal of the Empirical Literature, Finanzarchiv, vol. 53 pp. 68-112. Pfhler, W. (2001), Input-output analysis: A users guide and call for standardization, W. Pfhler (ed.), Regional Input-Output Analysis, Baden-Baden, pp. 11-45. Purcel, J. (2007), St Thomas Municipal Airport Economic Impact Study, West Vancouver. Robertson, J. A. W. (1995), Airports and economic regeneration, Journal of Air Transport Management, vol. 2, no. 2, pp. 81-88. Tomkins, J, Topham, N., Twomey, J. and Ward, R. (1998), Noise versus Access: The Impact of an Airport in an Urban Property Market, Urban Studies, vol. 35, no. 2, pp. 243-258. Wollersheim, C. and von Blanckenburg, K. (2009), External Benets of Airports, forthcoming.

6.

7. 8. 9. 10. 11. 12.

13. 14. 15. 16. 17. 18.

19. 20. 21. 22. 23. 24. 25.

Endnotes
1. Less used approaches such as Computable General Equilibrium Models (see for instance Forsyth (2006)) or the adaption of the Contingent Valuation Methodology, which is used for the estimation of catalytic effects (see Malina, Schwab, Wollersheim (2008)), will not be discussed. See Graham (2001), p. 200 ff. We will not focus on the distinction between technological and pecuniary externalities within the scope of this paper. Consequently, not all of the effects mentioned subsequently induce market failure. See Wollersheim / von Blanckenburg (2009) for details. See Robertson (1995), p. 84. See e.g. Batey / Madden / Scholeeld (1993) and Malina / Peltzer / Wollersheim (2006) for details.

2. 3.

26. 27. 28. 29.

4. 5.

Some studies also take into account scal effects from tax payments that are affected by the project. See e.g. Heuer / Klophaus / Schaper (2005). See Pfhler (2001), who has developed guidelines for conducting valid input-output studies. See Pfhler (2001), p. 11, Mnzenmaier (2001), S. 95. See Pfhler (2001), p. 13. See Bulwien et al. (1999). See Niemeier (2001), p. 206. Local and regional external effects of air transportation would not accrue, if there was no airport in the region. This does, however, not apply for greenhouse gas emissions as a global phenomenon. Greenhouse gas emission will only be avoided, if the overall level of air trafc decreases, that is, if the closure of an airport does not lead to a 100 % substitution of trafc to another airport. See Jorge / de Rus (2004), p. 312. See e.g. Lu / Morrell (2006) or Tomkins et al. (1998). See Pfhler / Hofmann / Bnte (1996) and Bhatta / Drennan (2003) for a detailed review of the empirical literature. See Benell / Prentice (1993) or Brueckner (2003). See Purcell (2007). The author states that, compared to a survey-based IOA, the models accuracy lies within a 5-10% range. However, another factor that contributes to the inaccuracy of the estimation might be due to the fact that the model is applied 14 years after its publication in 1993. The fact that employment per enplaned passenger can change over the time does not seem to be considered in this context. See Klophaus (2008) for the change of direct employment per enplaned passenger. See Green (2006), p. 9. See Granger (1969). See e.g. Lu / Morrell (2006) or Tomkins et al. (1998). The sample includes 24 member states of the European Union plus Switzerland. See gure 2. See Odgaard et al. (2005). The remarkably different treatment of airports in Germany is a result of a different allocation of compe-tences for federal and state authorities. Whereas the federal government is responsible for major road, rail and inland waterway projects, the federal states are in charge over the airports. CBA is only compulsory on the federal level. See Department for Transport (2009). See European Commission (2002). See e.g. Adler (1987), Mishan (1988), Nash (1993), Mackie / Preston (1998). See e.g. European Commission (2002), Federal Aviation Administration (1999), Bickel et al. (2006).

e-zine edition 44