The Nonlinear Effects of Market Structure on Service Quality: Evidence from the U.S. Airline Industry

Kang Hua Cao (), Betty Krier (), Chia-Mei Liu (), Brian McNamara () and Jerrod Sharpe ()
Additional contact information
Kang Hua Cao: Hong Kong Baptist University
Betty Krier: U.S. Department of Transportation Office of Inspector General
Chia-Mei Liu: Federal Aviation Administration
Brian McNamara: Federal Reserve Bank of Chicago
Jerrod Sharpe: U.S. Department of Transportation Office of Inspector General

Review of Industrial Organization, 2017, vol. 51, issue 1, No 3, 43-73

Abstract: Abstract This paper revisits the topic of the effect of airline competition on service quality, but allowing for nonlinear effects. Using a panel of monthly data for 5472 route-carrier combinations from 2005:4Q through 2012:4Q, we find that the average length of flight delays and cancellation rates increase with the concentration level. Worse service quality is linked to less competition. In addition, we find that the relationships between our measures of service quality and market concentration are nonlinear, so that the scale of the effects of a given change in airline competition appears to depend on the initial level of competition.

Keywords: Airlines; Competition; Flight delays and cancellations; Market structure; Nonlinear; Service quality (search for similar items in EconPapers)
JEL-codes: D43 L13 L93 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://link.springer.com/10.1007/s11151-016-9544-x Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:revind:v:51:y:2017:i:1:d:10.1007_s11151-016-9544-x

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11151/PS2

DOI: 10.1007/s11151-016-9544-x

Access Statistics for this article

Review of Industrial Organization is currently edited by L.J. White

More articles in Review of Industrial Organization from Springer, The Industrial Organization Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().