• DOI:10.1162/REST_a_00455
• Corpus ID: 57571664

Barriers to Entry in the Airline Industry: A Multidimensional Regression-Discontinuity Analysis of AIR-21

@article{Snider2015BarriersTE,
  title={Barriers to Entry in the Airline Industry: A Multidimensional Regression-Discontinuity Analysis of AIR-21},
  author={Connan Andrew Snider and Jonathan W. Williams},
  journal={Review of Economics and Statistics},
  year={2015},
  volume={97},
  pages={1002-1022}
}

• C. Snider, Jonathan W. Williams
• Published 1 December 2015
• Economics
• Review of Economics and Statistics

Abstract We investigate the success of legislation aimed at increasing competition at highly concentrated U.S. airports, mainly by forcing these airports to increase the availability of scarce facilities. We use a multidimensional regression-discontinuity approach to exploit a sharp discontinuity in the law’s implementation and identify its effects. We find that fares decrease by 13.4% (20.2%) in markets with one (both) end point(s) covered. Approximately half of the decline is driven by the entry of low-cost carriers. We find little evidence that the fare declines were accompanied by a diminished quality of service, and passenger volumes increased, which suggests the legislation improved consumer welfare.