Chapter 4 Estimation of Allocative Efficiency in Airports for a Pre-Privatization Period

In this chapter, we estimate the allocative efficiency of Spanish airports in the pre-privatization period from 2009 until 2014. The estimation of an input-oriented distance system of equations allows us to calculate different allocative efficiency measures using two approaches. The results show that allocative inefficiencies exist for Spanish airports during this period. Moreover, in breaking down allocative efficiency changes by periods coinciding with different government strategies of privatization, we find important differences. In the initial period, when the government encouraged decentralized management of airports and privatization of the largest airports, allocative efficiency improved (from 2009 to 2012). In the second period, however, when the government focused on centralized airport management and privatization of the system as a whole (from 2012 to 2014), inefficiencies slightly increased again.