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Regulation and Incentives in European Aviation

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Author Info
Gagnepain, Philippe
Marin, Pedro L

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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.

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Publisher 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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Handle: RePEc:ucp:jlawec:y:2006:v:49:i:1:p:229-48

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References listed on IDEAS
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.:
  1. Damien J. Neven & Lars-Hendrik Röller & Zhentang Zhang, 2002. "Endogenous Costs and Price-Cost Margins," Discussion Papers of DIW Berlin 294, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  2. 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. [Downloadable!] (restricted)
  3. Gagnepain, P. & Ivaldi, M., 1998. "Stochastic Frontiers and Asymmetric Information Models," Papers 98.503, Toulouse - GREMAQ.
  4. 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.
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  5. Marin, Pedro L, 1995. "Competition in European Aviation: Pricing Policy and Market Structure," Journal of Industrial Economics, Blackwell Publishing, vol. 43(2), pages 141-59, June. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Gagnepain, Philippe & Ivaldi, Marc, 2005. "Measuring Inefficiencies in Transport Systems: Between Technology and Incentives," IDEI Working Papers 377, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  2. Gagnepain, Philippe & Marín Uribe, Pedro Luis, 2005. "Alliances in the Air: Some Worldwide Evidence," CEPR Discussion Papers 5063, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  3. 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. [Downloadable!]
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This page was last updated on 2009-12-12.

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