Barriers to entry in the airline industry: : A multidimensional regression-discontinuity analysis of air-21.

• Autores: Connan Snider, Jonathan W. Williams
• Localización: The Review of economics and statistics, ISSN 0034-6535, Vol. 97, Nº 5, 2015, págs. 1002-1022
• Idioma: inglés
• DOI: 10.1162/rest_a_00455
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• Resumen

  • We investigate the success of legislation aimed at increasing competition at highly concentrated U.S. airports, mainly by forcing these airports to increase the availability of scarce facilities. We use a multidimensional regression-discontinuity approach to exploit a sharp discontinuity in the law's implementation and identify its effects. We find that fares decrease by 13.4% (20.2%) in markets with one (both) end point(s) covered. Approximately half of the decline is driven by the entry of low-cost carriers. We find little evidence that the fare declines were accompanied by a diminished quality of service, and passenger volumes increased, which suggests the legislation improved consumer welfare.