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Market Incentives for Safe Commercial Airline Operation Author info | Abstract | Publisher info | Download info | Related research | Statistics Borenstein, Severin
Zimmerman, Martin B
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Airlines are insured against most direct costs of an accident, but they cannot insure against demand loss. Some have argued that such consumer reaction will discipline unsafe operations. The authors' estimation of deviations from expected demand following accidents finds little or no effect prior to airline deregulation and weak indication of a response to recent crashes. These results are consistent with the changes the authors find in an airline's equity value following an accident, which are statistically significant, but quite small relative to the total social cost of the accident. Copyright 1988 by American Economic Association.
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Article provided by American Economic Association in its journal American Economic Review .
Volume (Year): 78 (1988)
Issue (Month): 5 (December)
Pages: 913-35
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Handle: RePEc:aea:aecrev:v:78:y:1988:i:5:p:913-35Contact details of provider: Email: Web page: http://www.aeaweb.org/aer/ More information through EDIRC
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