Airline deregulation and external costs: a welfare analysis
The 'market internal' effects of airline deregulation have amply been analysed in the literature. The economic evaluation of this policy change has generally shown favourable outcomes in terms of consumer welfare. These welfare effects may be termed market internal effects, as they reflect the welfare consequences of transactions that take place in the market. However, aviation typically affects welfare through both market internal and external effects: these external effects usually take the form of external costs resulting from aircraft noise, emission of pollutants and accidents. This is true for both regulated and deregulated markets, but the importance of the external costs relative to the welfare total is likely to differ between regulatory regimes. This article seeks to analyze how the presence of external costs affects the welfare effect of the liberalization of airline markets. As the size of external costs in an airline market is largely determined by the number of landings and take-offs, a spatial competition model that explicitly determines the frequency choice by airlines in symmetric equilibria is the basis of the analysis.
Volume (Year): 37 (2003)
Issue (Month): 8 (September)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
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.:
- Norman, Victor D & Strandenes, Siri Pettersen, 1990.
"Deregulation of Scandinavian Airlines: A Case Study of the Oslo-Stockholm Route,"
CEPR Discussion Papers
403, C.E.P.R. Discussion Papers.
- Victor D. Norman & Siri Strandenes, 1994. "Deregulation of Scandinavian Airlines: A Case Study of the Oslo-Stockholm Route," NBER Chapters, in: Empirical Studies of Strategic Trade Policy, pages 85-100 National Bureau of Economic Research, Inc.
- Norman, V.D. & Strandenes, S.P., 1990. "Deregulation Of Scandinavian Airlines - A Case Study Of The Oslo-Stockholm Route," Papers 04-90, Norwegian School of Economics and Business Administration-.
- Norman, George & Thisse, Jacques-Francois, 1996. "Product Variety and Welfare under Tough and Soft Pricing Regimes," Economic Journal, Royal Economic Society, vol. 106(434), pages 76-91, January.
- Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
- Panzar, John C, 1979. "Equilibrium and Welfare in Unregulated Airline Markets," American Economic Review, American Economic Association, vol. 69(2), pages 92-95, May.
- Morrison, Steven A & Winston, Clifford, 1990. "The Dynamics of Airline Pricing and Competition," American Economic Review, American Economic Association, vol. 80(2), pages 389-93, May.
- Economides, Nicholas, 1989. "Symmetric equilibrium existence and optimality in differentiated product markets," Journal of Economic Theory, Elsevier, vol. 47(1), pages 178-194, February.
- Bresnahan, Timothy F, 1987. "Competition and Collusion in the American Automobile Industry: The 1955 Price War," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 457-82, June.
- Giovanni Nero, 1998. "Spatial multiproduct pricing: empirical evidence on intra-European duopoly airline markets," Applied Economics, Taylor & Francis Journals, vol. 30(4), pages 465-475.
- Youdi Schipper & Piet Rietveld & Peter Nijkamp, 2002. "European Airline Reform: An Empirical Welfare Analysis," Journal of Transport Economics and Policy, University of Bath, vol. 36(2), pages 189-209, May.
- Raubitschek, Ruth S, 1987. "A Model of Product Proliferation with Multiproduct Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 35(3), pages 269-79, March.
When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:37:y:2003:i:8:p:699-718. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.