Regulation and Incentives in European Aviation
Abstract
We study the effect of liberalization on costs and competition in the European airline industry. We construct and estimate a model that includes demand, capacity, and cost equations. The latter accounts for inefficiency and cost-reducing effort. We show that failure to account for the choice of effort would lead to biased estimates of efficiency and competition in the industry. We also find that the last European Union package of deregulatory measures has led to significant efficiency improvements and has fostered competition.Download Info
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Bibliographic Info
Article provided by University of Chicago Press in its journal Journal of Law and Economics.
Volume (Year): 49 (2006)
Issue (Month): 1 (April)
Pages: 229-48
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Web page: http://www.journals.uchicago.edu/JLE/
Related research
Keywords:Other versions of this item:
- Gagnepain, Philippe & Marín, Pedro L., . "Regulation and Incentives in European Aviation," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5032, Universidad Carlos III de Madrid.
- Gagnepain, Philippe & Marín Uribe, Pedro Luis, 2004. "Regulation and Incentives in European Aviation," CEPR Discussion Papers 4318, C.E.P.R. Discussion Papers.
- Gagnepain, Philippe & Marín, Pedro L. [marin], . "Regulation and Incentives in European Aviation," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5041, Universidad Carlos III de Madrid.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
References
References listed on IDEASPlease 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.:
- Philippe Gagnepain & Marc Ivaldi, 2002. "Stochastic Frontiers and Asymmetric Information Models," Post-Print hal-00622849, HAL.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743.
- Philippe Gagnepain & Marc Ivaldi, 2002.
"Incentive Regulatory Policies: The Case of Public Transit Systems in France,"
RAND Journal of Economics,
The RAND Corporation, vol. 33(4), pages 605-629, Winter.
- Gagnepain, Philippe & Ivaldi, Marc, 1999. "Incentive Regulatory Policies: The Case of Public Transit Systems in France," IDEI Working Papers 84, Institut d'Économie Industrielle (IDEI), Toulouse.
- Gagnepain, Philippe & Ivaldi, Marc, . "Incentive Regulatory policies: The Case of Public Transit Systems in France," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5031, Universidad Carlos III de Madrid.
- Gagnepain, Philippe & Ivaldi, Marc, . "Incentive Regulatory policies: The Case of Public Transit Systems in France," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5040, Universidad Carlos III de Madrid.
- Gagnepain, P. & Ivaldi, M., 1999. "Incentive Regulatory Policies: the Case of Public Transit Systems in France," Papers 99.515, Toulouse - GREMAQ.
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"Capacity and Product Market Competition: Measuring Market Power in a "Puppy-Dog" Industry,"
CIG Working Papers
FS IV 97-31, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Roller, Lars-Hendrik & Sickles, Robin C., 2000. "Capacity and product market competition: measuring market power in a 'puppy-dog' industry," International Journal of Industrial Organization, Elsevier, vol. 18(6), pages 845-865, August.
- Philippe Gagnepain & Marc Ivaldi, 2002. "Incentive Regulatory policies: The Case of Public Transit Systems in France," Post-Print hal-00622846, HAL.
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- Severin Borenstein, 1989. "Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 344-365, Autumn.
- Ng, Charles K & Seabright, Paul, 2001. "Competition, Privatisation and Productive Efficiency: Evidence from the Airline Industry," Economic Journal, Royal Economic Society, vol. 111(473), pages 591-619, July.
- Neven, Damien J. & Roller, Lars-Hendrik, 1996. "Rent sharing in the European airline industry," European Economic Review, Elsevier, vol. 40(3-5), pages 933-940, April.
- Marin, Pedro L, 1995. "Competition in European Aviation: Pricing Policy and Market Structure," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 141-59, June.
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"Production Frontiers With Cross-Sectinal And Time-Series Variation In Efficiency Levels,"
Working Papers
89-18, C.V. Starr Center for Applied Economics, New York University.
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- David Genesove & Wallace P. Mullin, 1998. "Testing Static Oligopoly Models: Conduct and Cost in the Sugar Industry, 1890-1914," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 355-377, Summer.
- Gagnepain, P. & Ivaldi, M., 1998. "Stochastic Frontiers and Asymmetric Information Models," Papers 98.503, Toulouse - GREMAQ.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Gagnepain, Philippe & Ivaldi, Marc, 2005.
"Measuring Inefficiencies in Transport Systems: Between Technology and Incentives,"
IDEI Working Papers
377, Institut d'Économie Industrielle (IDEI), Toulouse.
- Gagnepain, Philippe & Ivaldi, Marc, . "Measuring Inefficiencies in Transport Systems: Between Technology and Incentives," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5043, Universidad Carlos III de Madrid.
- Phillipe Gagnepain & Pedro L. Marín, 2009.
"The effects of airline alliances: What do the aggregate data say?,"
Economics Working Papers
we096540, Universidad Carlos III, Departamento de Economía.
- Philippe Gagnepain & Pedro Marín, 2010. "The effects of airline alliances: what do the aggregate data say?," SERIEs, Spanish Economic Association, vol. 1(3), pages 251-276, July.
- Gagnepain, Philippe & Marín, Pedro L., . "The effects of airline alliances: What do the aggregate data say?," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5251, Universidad Carlos III de Madrid.
- Gagnepain, Philippe & Marín Uribe, Pedro Luis, 2005.
"Alliances in the Air: Some Worldwide Evidence,"
CEPR Discussion Papers
5063, C.E.P.R. Discussion Papers.
- Gagnepain, Philippe & Marín, Pedro L. [marin], . "Alliances in the Air: Some Worldwide Evidence," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5045, Universidad Carlos III de Madrid.
- Paul W. Dobson & Claudio A. Piga, 2009. "Mergers and Business Model Assimilation: Evidence from Low-Cost Airlines Takeovers," Discussion Paper Series 2009_2, Department of Economics, Loughborough University, revised Feb 2009.
- Philippe Gagnepain & Pedro Marin, 2010. "The effects of airline alliances: What do the aggregate data say?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00622831, HAL.
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