The Effects of Mergers on Prices, Costs, And Capacity Utilization in the U.S. Air Transportation Industry, 1970-84
We analyze the effect of mergers on various aspects of airline performance during the period 1970-84, using a panel data set constructed by Caves et al. Estimates derived from a simple "matched pairs" statistical model indicate that these mergers were associated with reductions in unit cost. The average annual rate of unit cost growth of carriers undergoing merger was 1.1 percentage points lower, during the five-year period centered on the merger, than that of carriers not involved in merger. Almost all of this cost reduction appears to have been passed on to consumers. Part of the cost reduction is attributable to merger-related declines in the prices of inputs, particularly labor, but about two-thirds of it is due to increased total factor productivity. One source of the productivity improvement is an increase in capacity utilization (load factor).
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.:
- Frank Lichtenberg & Donald Siegel, 1989.
"The Effect of Takeovers on the Employment and Wages of Central-Office and Other Personnel,"
NBER Working Papers
2895, National Bureau of Economic Research, Inc.
- Lichtenberg, F.R. & Siegel, D., 1989. "The Effect Of Takeovers On The Employment And Wages Of Central-Office And Other Personnel," Papers fb-_89-05, Columbia - Graduate School of Business.
- Frank R Lichtenberg & Donald Siegel, 1989. "The Effect Of Takeovers On The Employment And Wages Of Central-Office And Other Personnel," Working Papers 89-3, Center for Economic Studies, U.S. Census Bureau.
- Frank R. Lichtenberg & Donald Siegel, 1987. "Productivity and Changes in Ownership of Manufactoring Plants," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 643-684.
When requesting a correction, please mention this item's handle: RePEc:lev:wrkpap:wp_32. 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: (Marie-Celeste Edwards)
If references are entirely missing, you can add them using this form.