Insights Into the Drivers of Inefficiency in U.S. Airports

This study examines the determinants of airport technical inefficiency in the United States by distinguishing between persistent (long-term, structural) and transient (short-term, time-varying) inefficiency. Using panel data from 59 U.S. airports from 2009 to 2019, a stochastic frontier model with an output-oriented distance function is employed to decompose total inefficiency into its structural and operational components. Results show that average overall technical efficiency is 0.85, with about 45% of inefficiency attributed to persistent factors. Airports managed by independent authorities exhibit higher technical efficient than those under state or local control, highlighting the benefits of institutional autonomy. Membership in multi-airport systems is associated with lower persistent technical efficiency through coordinated planning, whereas hub airports exhibit greater persistent technical inefficiency due to congestion and coordination complexity. Airports in larger population centers exhibit lower transient inefficiency, while those in wealthier regions face efficiency losses from congestion.