That sounds right - the value of slots is, like that of spectrum, a rent. Auction them. But I am again intrigued by your resistance to hypothecation in other columns, and your embrace of it here. When are you for and when are you against it? As a rent, why does it not enter the general public pot and find its best use?
The other source of revenue is the land value increases in an airport's hinterland. There is good evidence, I think, that airports increase the economic activity in their vicinity a great deal. Should there not be some rent-skimming there for the public's choice to permit a new runway?
Companies always get to keep rent their create - NVIDIA's share price was so high because investors thought (until a week ago) they were on course to earn massive economic rents. The effect of LHR on local land rents is much more dissapated than for (say) a station. I think it would be hard to do - but we could and should have done it for the Elizabeth line.
Yes, of course. A normal rate of return. If the auctions under-fund the expansion, taxpayers should step in because of externalities, and if the auctions over-fund, taxpayers should also step in, this time as beneficiaries because we all have created the windfall.
That sounds right - the value of slots is, like that of spectrum, a rent. Auction them. But I am again intrigued by your resistance to hypothecation in other columns, and your embrace of it here. When are you for and when are you against it? As a rent, why does it not enter the general public pot and find its best use?
The other source of revenue is the land value increases in an airport's hinterland. There is good evidence, I think, that airports increase the economic activity in their vicinity a great deal. Should there not be some rent-skimming there for the public's choice to permit a new runway?
Companies always get to keep rent their create - NVIDIA's share price was so high because investors thought (until a week ago) they were on course to earn massive economic rents. The effect of LHR on local land rents is much more dissapated than for (say) a station. I think it would be hard to do - but we could and should have done it for the Elizabeth line.
But in what sense does _Heathrow_ create that rent? Surely the essential input to the runway that allowed the rent was the social permission?
Well, it costs £Billions to build as well - that needs a rate of return...
Yes, of course. A normal rate of return. If the auctions under-fund the expansion, taxpayers should step in because of externalities, and if the auctions over-fund, taxpayers should also step in, this time as beneficiaries because we all have created the windfall.