City-Pairs Versus Airport-Pairs: A Market-Definition Methodology for the Airline Industry

Jan Brueckner, Darin Lee and Ethan Singer ()

Review of Industrial Organization, 2014, vol. 44, issue 1, 25 pages

Abstract: This paper provides a methodology for deciding which airports warrant grouping in multi-airport metropolitan areas. The methodology is based on the comparability of incremental competition effects from nearby airports on average fares at a metropolitan area’s primary airport. Results from a quarterly panel data set for the period 2003–2009 provide strong evidence that city-pairs, rather than airport-pairs, are the appropriate market definition for analyses of passenger air transportation involving many (but not all) large metropolitan areas. Based on the proposed method, we offer a recommended list of airports that should be grouped when creating city-pairs for the analysis of competition in the US domestic airline industry. Copyright Springer Science+Business Media New York 2014

Keywords: Airports; City-pair; Market definition (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (36)

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DOI: 10.1007/s11151-012-9371-7

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