Airline market power and intertemporal price dispersion

Alberto A. Gaggero, Claudio A. Piga

Research output: Contribution to journalArticle

46 Citations (Scopus)

Abstract

This paper analyzes the empirical relationship between market structure and price dispersion in the airline markets connecting the U.K. and the Republic of Ireland. Price dispersion is measured by the Gini coefficient, calculated using fares posted on the Internet at specific days before takeoff. We control for passengers' heterogeneity in their purpose of travel, as well as for such peak periods as Christmas and Easter. Our finding of a negative correlation between competition and price dispersion suggests that competition is likely to hinder the airlines' ability to price discriminate, although this effect appears to be lessened in peak periods.

Original languageEnglish
Pages (from-to)552-577
Number of pages26
JournalJournal of Industrial Economics
Volume59
Issue number4
DOIs
Publication statusPublished - 1 Dec 2011
Externally publishedYes

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