Abstract:
Government agencies have responded to complaints about airport noise in rather traditional ways, primarily by mandating noise standards for jet aircraft. This case describes the problem of airport noise as of 1980, delineates the ways airplanes and airport operators can reduce noise damage, describes the existing retrofit requirement, and presents three alternative noise charge schemes.
Learning Objective:
The case gives students an opportunity to apply abstract economic concepts to a real-world problem of externalities and, more specifically, provides a vehicle for stimulating discussion about the merits of standards versus incentive-based charge schemes.