IDEAS home Printed from https://ideas.repec.org/a/taf/ijecbs/v17y2010i2p147-166.html
   My bibliography  Save this article

Advertising Expenditure, Enplanement, and Market Concentration

Author

Listed:
  • Jay Squalli

Abstract

This paper investigates the long-run relationship between advertising expenditure and enplanement (representing the number of passengers boarding an aircraft), advertising expenditure across carriers, and advertising expenditure and market concentration for the six largest US airlines. Advertising expenditure is evidenced to be strategic, although not clearly effective at increasing enplanement, suggesting collusive behavior. Advertising is also evidenced to be, for the most part, balancing in nature across rival carriers. Further tests suggest a positive and linear relationship with positive bi-directional causality between advertising and market concentration. This paper's findings raise three important questions. First, if advertising is not clearly effective at increasing enplanement, then why advertise? Second, if advertising increases market concentration, then shouldn't airline activities be under some degree of scrutiny, or even be partially regulated? Third, could airline advertising be important in explaining higher post-deregulation fares?

Suggested Citation

  • Jay Squalli, 2010. "Advertising Expenditure, Enplanement, and Market Concentration," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 17(2), pages 147-166.
    • Handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:147-166
    DOI: 10.1080/13571516.2010.483084
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/10.1080/13571516.2010.483084
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13571516.2010.483084?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ijecbs:v:17:y:2010:i:2:p:147-166. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIJB20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.