MARGINAL COSTS AND SCALE ECONOMIES IN SPANISH PORTS: A MULTIPRODUCT APPROACH

The services of Spanish ports can be classified into two main groups according to administrative and financial responsibility: those related to infrastructure and navigation aids, and those related to cargo handling. The former services are managed by the Autoridades Portuarias who are in charge of the planning, construction and management of port facilities (besides a regulatory role regarding port operations). Although the use of common infrastructure makes it difficult to assign this type of costs among the many services provided, good estimates of marginal costs for the different types of commodities that use the port are required for economic efficiency. It is relevant as well to know whether marginal cost pricing would cover infrastructure costs. In this paper cargo specific marginal costs and scale economies are calculated for the infrastructure services of Spanish ports by means of an estimated multiproduct cost function. Data includes 135 observations corresponding to the main 27 Spanish ports between years 1985 and 1989. Results show that liquid bulk has the lowest marginal cost, followed by dry bulk and containers. Non-containerized general cargo has the highest marginal cost. In general, increasing returns to scale suggest that efficient pricing would not be enough to pay for port development. For the covering abstract, see IRRD 899083.