Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5110538 | Transportation Research Part E: Logistics and Transportation Review | 2017 | 25 Pages |
Abstract
Since 2005, the US airline industry has undergone a series of consolidations. We provide a comprehensive assessment of the overall effects of five major recent mergers on passengers' welfare. We compute consumer surplus changes using passenger discrete choice models based on the attributes of airlines and routes. We then evaluate these changes, as well as changes in frequency and fare, using a difference-in-differences approach. Our major findings include large consumer welfare gains following the DL-NW and UA-CO mergers, welfare gains in regions dominated by the larger carrier in the merger, and welfare losses in highly concentrated markets following legacy mergers.
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Authors
Vikrant Vaze, Tian Luo, Reed Harder,