Competition and Quality: Evidence from High-Speed Railways and Airlines

Hanming Fang, Long Wang and Yang Yang ()
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Yang Yang: The Chinese University of Hong Kong

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: The entry of High-Speed Railways (HSR) represents a disruptive competition to air-lines, particularly for short- to medium-distance journeys. Utilizing a unique dataset that contains the details of all ?ights departing from Beijing to 113 domestic desti-nations in China since January 2009, we employ a di?erence-in-di?erences approach to examine the e?ects of HSR entry on the quality of service provided by airlines as proxied by their on-time performance, and to identify the channels through which competition leads to quality improvement. We document two main ?ndings. First, the competition from the entry of HSR leads to signi?cant reductions in the mean and variance of travel delays on the a?ected airline routes. Second, the reductions in departure delays–which are controlled mostly by airlines, and the duration of taxi-in time–which are controlled mostly by destination airports, are identi?ed as the main sources of the improvement in the airlines’ on-time performance.

Keywords: Competition; Quality; Transportation; Airlines; High-speed Rail; On-time Performance (search for similar items in EconPapers)
JEL-codes: L1 L91 O18 R4 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2020-06-26
New Economics Papers: this item is included in nep-cna, nep-com, nep-reg, nep-tra and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Working Paper: Competition and Quality: Evidence from High-Speed Railways and Airlines (2020)
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