Frederico Araújo Turolla () (Escola Superior de Propaganda e Marketing (ESPM) and Fundação Getúlio Vargas (FGV). R. Dr. Neto de Araujo 320 cj 1307, Vila Mariana, São Paulo, Brazil) Moisés Diniz Vassallo () (Center for Studies of Airline Regulation and Competition, Aeronauthical Institute of Technology (NECTAR/ITA). Av. Escola Politécnica 2.200, AP 73, Bloco Itália - Jaquaré, São Paulo, Brazil.) Alessandro V. Marques de Oliveira () (Center for Studies of Airline Regulation and Competition, Aeronauthical Institute of Technology (NECTAR/ITA). Rua Vera Lúcia Cardoso Silva Barros 84, Urbanova, São José dos Campos, Brazil.)
Additional information is available for the following
registered author(s):
This paper presents a test of intermodal interaction between coaches and airlines in Brazil in order to check for the efficacy of recent liberalization measures designed to promote competition in both industries. Interstate travel service in the country is heavily provided by coaches, and the system is fully operated by the private sector under public delegation through permits and authorizations. Agency-based regulation was introduced in 2002 along with a price cap regime aimed at enhancing the flexibility to change fares in response to demand and cost conditions. By making use of a reaction function-based model of coach operators’ pricing decisions in the interstate travel market, we then estimate the sensitivity of the changes in coach fares to the changes in airline fares in a simultaneous-equation framework. Intermodal interaction among coach operators and airlines is found to be highly significant and probably due to the competition for a small but increasing set of premium, quality-sensitive, coach passengers.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Article provided by Ilades-Georgetown University, Economics Department in its journal Revista de Analisis Economico.
Find related papers by JEL classification: L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data