 Bridging Quasi-Experimental and Structural Approaches for Robust Evaluation of US Airline MergersGaurab Aryal, Anirban Chattopadhyaya and Federico Ciliberto No 20683, CEPR Discussion Papers from Centre for Economic Policy Research Abstract: We bridge quasi-experimental and structural approaches to develop a robust method for retrospective merger evaluation. First, we show that the standard difference-indifferences estimation equation can be interpreted as a “reduced form†of our structural equations, formally bridging these methodologies. Demand and cost parameters enable the construction of a robust measure of the merger price effect that remains identified even when the difference-in-differences approach is not, and can be decomposed into efficiency gains versus conduct changes among the remaining firms. Second, we enhance the structural approach by weighting each market’s contribution to the moment conditions using market- and time-specific synthetic weights when the number of treated markets is limited. Applying this methodology to three major airline mergers, we find that modest efficiency gains are entirely offset by increased coordination, particularly in later mergers. The synthetic GMM refinement sharpens these findings, uncovering anti-competitive effects that standard approaches miss. JEL-codes: D43 L40 L41 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:20683 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK. |
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