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An econometric study of the effects of airport privatization on airfares in Brazil

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  • Brito, Igor R.S.
  • Oliveira, Alessandro V.M.
  • Dresner, Martin E.

Abstract

This paper develops empirical models to test the impact of airport privatization on airline fares. We employ a difference-in-difference approach combined with an endogenous switching regression model to account for the selection of airports to be privatized. The results suggest that prices for tickets on routes with at least one privatized airport at an endpoint are about 3–3.5% higher than on routes between two publicly managed airports. By testing moderating effects, we find evidence that market dominance enforces the privatization impact on airfares. The main conclusions are consistent using various control group classifications.

Suggested Citation

  • Brito, Igor R.S. & Oliveira, Alessandro V.M. & Dresner, Martin E., 2021. "An econometric study of the effects of airport privatization on airfares in Brazil," Transport Policy, Elsevier, vol. 114(C), pages 338-349.
    • Handle: RePEc:eee:trapol:v:114:y:2021:i:c:p:338-349
    DOI: 10.1016/j.tranpol.2021.10.015
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    More about this item

    Keywords

    Air transport; Privatization; Airports; Airlines; Econometrics;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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