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Fear of Flying? Economic Analysis of Airline Safety

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  • Nancy L. Rose

Abstract

The safety of the commercial airline industry has attracted considerable public attention and debate since economic deregulation of the industry in 1978. These concerns have energized economic research on three aspects of airline safety. First, has the level of airline safety declined since deregulation? Research on this topic investigates whether heightened public concerns about air safety derive from objective increases in accident risks. Second. what accounts for differences in safety performance across carriers? This literature analyzes heterogeneity in carriers' safety records as a means of learning about factors that influence safety performance. Third, how do markets respond to airline accidents? This work explores the effectiveness of market incentives in constraining the safety provision of firms. This paper describes our progress in answering each of these queries.

Suggested Citation

  • Nancy L. Rose, 1991. "Fear of Flying? Economic Analysis of Airline Safety," NBER Working Papers 3784, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3784
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    Cited by:

    1. Andreas Papatheodorou & Nikos Platis, 2007. "Airline Deregulation, Competitive Environment and Safety," Rivista di Politica Economica, SIPI Spa, vol. 97(1), pages 221-242, January-F.
    2. Raghavan, Sunder & Rhoades, Dawna L., 2005. "Revisiting the relationship between profitability and air carrier safety in the US airline industry," Journal of Air Transport Management, Elsevier, vol. 11(4), pages 283-290.
    3. Liou, James J.H. & Tzeng, Gwo-Hshiung & Chang, Han-Chun, 2007. "Airline safety measurement using a hybrid model," Journal of Air Transport Management, Elsevier, vol. 13(4), pages 243-249.
    4. Kaplanski, Guy & Levy, Haim, 2010. "Sentiment and stock prices: The case of aviation disasters," Journal of Financial Economics, Elsevier, vol. 95(2), pages 174-201, February.
    5. Taleb, Nassim Nicholas & Bar-Yam, Yaneer & Cirillo, Pasquale, 2022. "On single point forecasts for fat-tailed variables," International Journal of Forecasting, Elsevier, vol. 38(2), pages 413-422.
    6. Button, Kenneth & Clarke, Audrey & Palubinskas, Ginta & Stough, Roger & Thibault, Marc, 2004. "Conforming with ICAO safety oversight standards," Journal of Air Transport Management, Elsevier, vol. 10(4), pages 249-255.
    7. Sobieralski, Joseph B., 2013. "The cost of general aviation accidents in the United States," Transportation Research Part A: Policy and Practice, Elsevier, vol. 47(C), pages 19-27.
    8. Peter Madsen & Robin L. Dillon & Catherine H. Tinsley, 2016. "Airline Safety Improvement Through Experience with Near‐Misses: A Cautionary Tale," Risk Analysis, John Wiley & Sons, vol. 36(5), pages 1054-1066, May.
    9. Nassim Nicholas Taleb & Yaneer Bar-Yam & Pasquale Cirillo, 2020. "On Single Point Forecasts for Fat-Tailed Variables," Papers 2007.16096, arXiv.org.
    10. Rhoades, Dawna L & Waguespack, Blaise, 2000. "Judging a book by it's cover: the relationship between service and safety quality in US national and regional airlines," Journal of Air Transport Management, Elsevier, vol. 6(2), pages 87-94.
    11. Zotova, Irina, 2017. "Post-crash airline pricing: A case study of Alaska Airlines Flight 261," Economics of Transportation, Elsevier, vol. 10(C), pages 18-22.
    12. Tay T. R. Koo & Carlo Caponecchia & Ann Williamson, 2018. "How important is safety in making flight choices? Evidence from simple choice experiments," Transportation, Springer, vol. 45(1), pages 159-175, January.
    13. Akyildirim, Erdinc & Corbet, Shaen & O'Connell, John F. & Sensoy, Ahmet, 2021. "The influence of aviation disasters on engine manufacturers: An analysis of financial and reputational contagion risks," International Review of Financial Analysis, Elsevier, vol. 74(C).
    14. Button, Kenneth & Drexler, Jonathan, 2006. "Are measures of air-misses a useful guide to air transport safety policy?," Journal of Air Transport Management, Elsevier, vol. 12(4), pages 168-174.
    15. Dionne, Georges & Gagne, Robert & Gagnon, Francois & Vanasse, Charles, 1997. "Debt, moral hazard and airline safety An empirical evidence," Journal of Econometrics, Elsevier, vol. 79(2), pages 379-402, August.
    16. Triant Flouris & Paul Hayes & Kuntara Pukthuanthong‐Le & Dolruedee Thiengtham & Thomas Walker, 2009. "Recent Developments in the Aviation Insurance Industry," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 12(2), pages 227-249, September.
    17. Maria Ángeles Alcaide & Alberto Celani & Paula Cervera Chasan & Elena De La Poza, 2022. "Mathematical Modeling of the Financial Impact of Air Crashes on Airlines and Involved Manufacturers," Mathematics, MDPI, vol. 10(5), pages 1-18, February.
    18. Walker, Thomas John & Walker, Marcus Glenn & Thiengtham, Dolruedee Nuttanontra & Pukthuanthong, Kuntara, 2014. "The role of aviation laws and legal liability in aviation disasters: A financial market perspective," International Review of Law and Economics, Elsevier, vol. 37(C), pages 51-65.
    19. Chang, Yu-Hern & Yeh, Chung-Hsing, 2004. "A new airline safety index," Transportation Research Part B: Methodological, Elsevier, vol. 38(4), pages 369-383, May.
    20. Ito, Harumi & Lee, Darin, 2005. "Assessing the impact of the September 11 terrorist attacks on U.S. airline demand," Journal of Economics and Business, Elsevier, vol. 57(1), pages 75-95.
    21. Peck, Milo W. & Scheraga, Carl A. & Boisjoly, Russell P., 1998. "Assessing the relative efficiency of aircraft maintenance technologies: an application of data envelopment analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(4), pages 261-269, May.
    22. repec:ebl:ecbull:v:12:y:2007:i:6:p:1-7 is not listed on IDEAS
    23. Wang, Zuozheng & Hofer, Christian & Dresner, Martin E., 2013. "Financial condition, safety investment and accident propensity in the US airline industry: A structural analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 49(1), pages 24-32.
    24. Bosch, Jean-Claude & Eckard, E Woodrow & Singal, Vijay, 1998. "The Competitive Impact of Air Crashes: Stock Market Evidence," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 503-519, October.

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    More about this item

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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