IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry

  • Severin Borenstein
  • Nancy L. Rose

Following a brief review of the U.S. domestic airline industry under regulation (1938-1978), we study the changes that have occurred in pricing, service, and competition in the 28 years since deregulation. We then examine some of the major public policy issues facing the industry: (a) the sustainability of competition and volatility of airline profits, (b) possible market power of dominant airlines, and (c) congestion and investment shortfall in the airport and air traffic infrastructure.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.nber.org/papers/w13452.pdf
Download Restriction: no

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13452.

as
in new window

Length:
Date of creation: Sep 2007
Date of revision:
Publication status: published as How Airline Markets Work…or Do They? Regulatory Reform in the Airline Industry , Severin Borenstein, Nancy L. Rose. in Economic Regulation and Its Reform: What Have We Learned? , Rose. 2014
Handle: RePEc:nbr:nberwo:13452
Note: IO
Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Web page: http://www.nber.org
Email:


More information through EDIRC

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.:

as in new window
  1. Prescott, Edward C, 1975. "Efficiency of the Natural Rate," Journal of Political Economy, University of Chicago Press, vol. 83(6), pages 1229-36, December.
  2. Dionne, G. & Gagne, R. & Gagnon, F. & Vanasse, C., 1994. "Debts, moral hazard and airline safety : an empirica evidence," CEPREMAP Working Papers (Couverture Orange) 9419, CEPREMAP.
  3. James D. Dana Jr., 1999. "Equilibrium Price Dispersion Under Demand Uncertainty: The Roles of Costly Capacity and Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 632-660, Winter.
  4. Paul Joskow & Nancy L. Rose, 1987. "The Effects of Economic Regulation," Working papers 447, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Berry, Steven T, 1990. "Airport Presence as Product Differentiation," American Economic Review, American Economic Association, vol. 80(2), pages 394-99, May.
  6. Alfred E. Kahn, 1988. "The Economics of Regulation: Principles and Institutions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610523, June.
  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 223-26, April.
  8. Leonardo J. Basso & Sergio R. Jara-Díaz, 2005. "Calculation of Economies of Spatial Scope from Transport Cost Functions with Aggregate Output with an Application to the Airline Industry," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 39(1), pages 25-52, January.
  9. Hurdle, Gloria J, et al, 1989. "Concentration, Potential Entry, and Performance in the Airline Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 38(2), pages 119-39, December.
  10. Garrick Blalock & Vrinda Kadiyali & Daniel H. Simon, 2007. "The Impact of Post-9/11 Airport Security Measures on the Demand for Air Travel," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 731-755.
  11. Theodore E. Keeler, 1972. "Airline Regulation and Market Performance," Bell Journal of Economics, The RAND Corporation, vol. 3(2), pages 399-424, Autumn.
  12. Davies, David G, 1971. "The Efficiency of Public versus Private Firms, The Case of Australia's Two Airlines," Journal of Law and Economics, University of Chicago Press, vol. 14(1), pages 149-65, April.
  13. Borenstein, Severin & Rose, Nancy L, 1994. "Competition and Price Dispersion in the U.S. Airline Industry," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 653-83, August.
  14. Nancy L. Rose, 1985. "The Incidence of Regulatory Rents in the Motor Carrier Industry," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 299-318, Autumn.
  15. S. Herbert Unterberger & Edward C. Koziara, 1975. "Airline strike insurance: A study in escalation," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 29(1), pages 26-45, October.
  16. Steven A. Morrison, 2001. "Actual, Adjacent, and Potential Competition Estimating the Full Effect of Southwest Airlines," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 35(2), pages 239-256, May.
  17. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
  18. Douglas W. Caves & Laurits R. Christensen & Michael W. Tretheway, 1984. "Economies of Density versus Economies of Scale: Why Trunk and Local Service Airline Costs Differ," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 471-489, Winter.
  19. Douglas, George W & Miller, James C, III, 1974. "Quality Competition, Industry Equilibrium, and Efficiency in the Price-Constrained Airline Market," American Economic Review, American Economic Association, vol. 64(4), pages 657-69, September.
  20. Christopher Mayer & Todd Sinai, 2003. "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil," American Economic Review, American Economic Association, vol. 93(4), pages 1194-1215, September.
  21. Wallace Hendricks & Peter Feuille & Carol Szerszen, 1980. "Regulation, deregulation, and collective bargaining in airlines," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 34(1), pages 67-81, October.
  22. D. Mark Kennet, 1993. "Did Deregulation Affect Aircraft Engine Maintenance? An Empirical Policy Analysis," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 542-558, Winter.
  23. James D. Dana Jr., 1999. "Using Yield Management to Shift Demand When the Peak Time is Unknown," RAND Journal of Economics, The RAND Corporation, vol. 30(3), pages 456-474, Autumn.
  24. Michael D. Whinston & Scott C. Collins, 1992. "Entry and Competitive Structure in Deregulated Airline Markets: An Event Study Analysis of People Express," RAND Journal of Economics, The RAND Corporation, vol. 23(4), pages 445-462, Winter.
  25. James Peoples, 1998. "Deregulation and the Labor Market," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 111-130, Summer.
  26. Gustavo E. Bamberger & Dennis W. Carlton & Lynette R. Neumann, 2001. "An Empirical Investigation of the Competitive Effects of Domestic Airline Alliances," NBER Working Papers 8197, National Bureau of Economic Research, Inc.
  27. Hirsch, Barry, 2006. "Wage Determination in the U.S. Airline Industry: Union Power under Product Market Constraints," IZA Discussion Papers 2384, Institute for the Study of Labor (IZA).
  28. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
  29. Todd C. Pulvino, 1998. "Do Asset Fire Sales Exist? An Empirical Investigation of Commercial Aircraft Transactions," Journal of Finance, American Finance Association, vol. 53(3), pages 939-978, 06.
  30. Hirsch, Barry T & Macpherson, David A, 2000. "Earnings, Rents, and Competition in the Airline Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 125-55, January.
  31. Evans, William N & Kessides, Ioannis N, 1993. "Localized Market Power in the U.S. Airline Industry," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 66-75, February.
  32. 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.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:13452. 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: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.