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East‐West Airlines' Sydney‐Melbourne Service: Market Expansion or Demand Diversion?

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  • PETER HARTLEY
  • CHRIS TRENGOVE

Abstract

Data on 1278 flights on the East‐West Airlines Sydney‐Albury‐Melbourne services, beginning when the Sydney‐Melbourne excursion fare was first offered, are used to estimate three demand curves for the jointly provided services. The elasticities of demand for the Sydney‐Melbourne service suggest it expanded the market as much as it attracted passengers from the trunk carriers. The econometric problem of joint estimation with censored dependent variables should be of general interest.

Suggested Citation

  • Peter Hartley & Chris Trengove, 1990. "East‐West Airlines' Sydney‐Melbourne Service: Market Expansion or Demand Diversion?," The Economic Record, The Economic Society of Australia, vol. 66(3), pages 203-220, September.
    • Handle: RePEc:bla:ecorec:v:66:y:1990:i:3:p:203-220
    DOI: 10.1111/j.1475-4932.1990.tb01723.x
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    7. Davies, David G, 1977. "Property Rights and Economic Efficiency-The Australian Airlines Revisited," Journal of Law and Economics, University of Chicago Press, vol. 20(1), pages 223-226, April.
    8. Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
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