I am always puzzled by these externalities from airport extensions in the face of fully specified property rights. There are externalities when there is a gap in property rights. There is no gap in the property rights over the airport extension.
Benefit cost analysis is usually for investments where you are planning to give away the output or heavily subsidised it such is the case with a road.
Fairfax’s Hamish Rutherford had a substantial piece in Saturday’s Dominion-Post on the proposed Wellington airport runway extension, under the heading If we build it, will they come? (a rather similar title to my own first post on the airport last year). It seemed like a fairly balanced article, covering many (but not all) of the key uncertainties about the project. Most of them wouldn’t be a matter for public concern if this was to be a privately-funded project, but it isn’t – and everyone agrees on that.
There was an interesting quote to that effect at the start of the article from airport company chair Tim Brown.
As Tim Brown tells it, the first time he discussed a “back of the envelope”-type analysis of the cost to extend Wellington runway with the airport’s chief executive, Steve Sanderson, the conversation was “completely negative”.
…..Brown had just been presented an outline of…
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Utopia, you are standing in it! 
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