2 thoughts on “Airport expansion: We need Coasean bargaining, not political horse-trading”

  1. Posted 17/05/2016 at 14:14 | Permalink

    No need for a referendum: just allow the airport management bid for the land they need without the artificial advantage of compulsory purchase.

    You would soon see whether or not the project was worthwhile.

  2. Posted 19/05/2016 at 09:46 | Permalink

    Because the landing slots at Heathrow and Gatwick have a scarcity value, and reduction in APD will not result in lower airfares, it will only make the slots worth more.

    There is an argument that being the case APD should go up not down. However, an auction of those slots would be more efficient.

    A simple 100% land value tax would sort out any planning externalities via the market.

    It’s an understandable mistake to think that such taxes should be local. However if that were to happen, they would act as a pure subsidy, distorting the market, misallocating land and capital resources.

    Local taxes are a bad idea in general. Incentives are better aligned with as many services as possible being locally devolved, with an equal per capita grant.

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