Airline Deregulation, Competitive Environment and Safety
AbstractAir traffic has substantially increased since the introduction of deregulation in both the USA and the European Union. Moreover, aircraft accidents involving fatalities have exhibited a downward trend over time. Still, a series of recently publicized accidents has raised again a serious issue, namely whether cost reduction in a deregulated aviation environment is achieved at the expense of safety standards. To address this question, the paper proposes a mathematical model, which highlights the relationship between competitive behaviour and tort liability. The model has important policy implications suggesting that the level of airline penalisation should be reduced when market rivalry is relaxed and conversely.
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Bibliographic InfoArticle provided by SIPI Spa in its journal Rivista di Politica Economica.
Volume (Year): 97 (2007)
Issue (Month): 1 (January-February)
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Find related papers by JEL classification:
- L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
- L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Borenstein, Severin & Zimmerman, Martin B, 1988. "Market Incentives for Safe Commercial Airline Operation," American Economic Review, American Economic Association, vol. 78(5), pages 913-35, December.
- Papatheodorou, Andreas, 2002. "Civil aviation regimes and leisure tourism in Europe," Journal of Air Transport Management, Elsevier, vol. 8(6), pages 381-388.
- Robert D. Cooter, 1991. "Economic Theories of Legal Liability," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 11-30, Summer.
- Raghavan, Sunder & Rhoades, Dawna L., 2005. "Revisiting the relationship between profitability and air carrier safety in the US airline industry," Journal of Air Transport Management, Elsevier, vol. 11(4), pages 283-290.
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