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Estimating the Economic Effects of Deregulation: Evidence from the Turkish Airline Industry

Author

Listed:
  • Tamer Cetin

    (Yildiz Technical University)

  • Kadir Y. Eryigit

    (Uludag University)

Abstract

This paper mainly studies the effect of deregulation on prices and quantity. For this aim, we employ cointegration methodology with structural breaks to empirically investigate the simultaneous relationship between deregulation, ticket prices, and the number of passengers in the Turkish airline industry. The findings confirm that deregulation increases quantity and decreases prices through accessibility to air transport service and actual competition, respectively. Also, structural breaks suggest that deregulation of prices and entry into the market has remarkable effect on the change in ticket prices and the number of passengers.

Suggested Citation

  • Tamer Cetin & Kadir Y. Eryigit, 2015. "Estimating the Economic Effects of Deregulation: Evidence from the Turkish Airline Industry," Koç University-TUSIAD Economic Research Forum Working Papers 1525, Koc University-TUSIAD Economic Research Forum.
  • Handle: RePEc:koc:wpaper:1525
    as

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    File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_1525.pdf
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    References listed on IDEAS

    as
    1. Søren Johansen & Rocco Mosconi & Bent Nielsen, 2000. "Cointegration analysis in the presence of structural breaks in the deterministic trend," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 216-249.
    2. Bilotkach, Volodymyr & Lakew, Paulos Ashebir, 2014. "On sources of market power in the airline industry: Panel data evidence from the US airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 288-305.
    3. Søren Johansen & Rocco Mosconi & Bent Nielsen, 2000. "Cointegration analysis in the presence of structural breaks in the deterministic trend," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 216-249.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Deregulation; Airlines; Cointegration; Structural Breaks.;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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