Competition and service quality: New evidence from the airline industry

Daniel Greenfield

Economics of Transportation, 2014, vol. 3, issue 1, 80-89

Abstract: Previous studies examine the relationship between competition and airline service quality by regressing on-time performance on market structure. These studies implicitly assume that market structure is exogenously determined with respect to service quality. To address the likely endogeneity of market structure I employ two distinct instrumental variables. The first is lagged market structure. The second exploits a global airline merger that induced differential variations in market structure across hundreds of airport-pair markets. I find that the effect of competition on airline delays is three times stronger than previous studies suggest.

Keywords: Product quality; Competition; Market structure (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (37)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecotra:v:3:y:2014:i:1:p:80-89

DOI: 10.1016/j.ecotra.2013.12.005

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