Open Skies: Estimating Travelers' Benefits from Free Trade in Airline Services

Clifford Winston and Jia Yan

American Economic Journal: Economic Policy, 2015, vol. 7, issue 2, 370-414

Abstract: The United States has negotiated bilateral open skies agreements to deregulate airline competition on US international routes, but little is known about their effects on travelers' welfare and the gains from the US negotiating agreements with more countries. We develop a model of international airline competition to estimate the effects of open skies agreements on fares and flight frequency. We find the agreements have generated at least $4 billion in annual gains to travelers and that travelers would gain an additional $4 billion if the US negotiated agreements with other countries that have a significant amount of international passenger traffic. (JEL D12, L11, L51, L93, L98)

JEL-codes: D12 L11 L51 L93 L98 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/pol.20130071
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Citations: View citations in EconPapers (18)

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