Airline Merger Effects Along the Exposure Distribution

Benjamin T. Leyden

No 12669, CESifo Working Paper Series from CESifo

Abstract: I evaluate the competitive effects of four major U.S. airline mergers (2008-2013) using a continuous difference-in-differences model. Standard merger retrospectives typically rely on binary treatment classifications that collapse important variation in competitive exposure. I construct three continuous route-level exposure measures — simulated ∆HHI (direct competitive overlap), merger share (the merging carriers' combined presence), and non-overlap merger share (merger share on routes where only one merging carrier operated) — and estimate dose-response curves for each. Results reveal substantial heterogeneity both across mergers and within each merger across the exposure distribution, with the three measures yielding different conclusions, as each captures a distinct competitive channel.

Keywords: airline mergers; continuous difference-in-differences; merger retrospective (search for similar items in EconPapers)
JEL-codes: C21 L13 L41 L93 (search for similar items in EconPapers)
Date: 2026
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