Open AccessEfficiency of European Airports: Parametric Versus Non-parametric Approach
Author(s) -
Markéta Matulová,
Jana Rejentová
Publication year - 2021
Publication title -
croatian operational research review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.176
H-Index - 5
eISSN - 1848-9931
pISSN - 1848-0225
DOI - 10.17535/crorr.2021.0001
Subject(s) - inefficiency , parametric statistics , nonparametric statistics , computer science , econometrics , stochastic frontier analysis , envelope (radar) , runway , operations research , function (biology) , production (economics) , mathematics , statistics , economics , telecommunications , history , radar , archaeology , evolutionary biology , biology , macroeconomics , microeconomics
This paper presents a performance evaluation of European airports, based on the application of both parametric and non-parametric approaches. We have evaluated the 115 busiest airports in Europe according to the number of passengers checked-in in 2018. The four inputs we used were the number of Terminals, Runways, Boarding gates, and Aircraft stands. Three variables were used to describe the outputs, namely, Passengers, Movements, and Cargo. The parametric method we chose to apply was the Stochastic Frontier Analysis (SFA) with the Cobb-Douglas production function, the Half-Normal distribution of inefficiency component, and the Normal distribution of an error term. As a basic SFA model only allows for a single output, we employed different methods to get a single efficiency score for each and every airport. Next, we evaluated the airport performance non-parametrically using several Data Envelope Analysis (DEA) models including the super-efficiency model. We compared the results obtained by individual approaches and discussed their pros and cons. Finally, we applied the program evaluation procedure to explore the effect of the different forms of airports ownership on their performance.