Technical change and productivity growth in airports: A case study

This paper analyses the rate of technical progress at Portuguese airports between 1990 and 2000, using a stochastic cost frontier method. A translog frontier model is used and the maximum likelihood estimation technique is employed to estimate the empirical model. We estimate the efficient scores and disentangle the rate of technical progress into three components: pure technical progress, non-neutral technical progress and scale-augmenting technical progress. The results show that the average score is 88%, denoting a relatively high degree of waste, despite the fact that technical change contributed to a reduction in costs.