Escobari, Diego (2010): Frequent flyer programs premium and the role of airport dominance. Published in: Applied Economics Letters , Vol. 18, No. 16 (2011): pp. 1565-1569.
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This paper estimates a Frequent Flyer Programs (FFP) price premium -- higher fares associated with a larger proportion of travelers using FFP. The results show that FFP affect the entire price distribution, but the effect is larger on lower end fares. In addition, airport dominance increases the premium on less expensive fares but has no effect on the premium associated with the right tail of the price distribution.
| Item Type: | MPRA Paper |
|---|---|
| Language: | English |
| Keywords: | Frequent Flyer Programs; Pricing; Airlines; Panel Data |
| Subjects: | L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L93 - Air Transportation C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C23 - Models with Panel Data L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L12 - Monopoly; Monopolization Strategies |
| ID Code: | 36231 |
| Deposited By: | Diego Escobari |
| Deposited On: | 28. Jan 2012 06:04 |
| Last Modified: | 28. Jan 2012 06:04 |
| References: | Bilotkach, V. 2009. Parallel Frequent Flier Program Partnerships: Impact on Frequency. Working Paper. University of California, Irvine. Borenstein, S. 1989. Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry. Rand Journal of Economics 20, 344-365. Borenstein, S. and N.L. Rose, 1994. Competition and price dispersion in the U.S. airline industry. Journal of Political Economy 102, 653-683. Gerardi, K.S. and A.H. Shapiro, 2009. Does Competition Reduce Price Dispersion? New Evidence from the Airline Industry. Journal of Political Economy 117, 1-37. Lederman, M., 2007. Do Enhancements to Loyalty Programs Affect Demand? The Impact of International Frequent Flyer Partnerships on Domestic Airline Demand. Rand Journal of Economics 38, 1134-1158. Lederman, M., 2008. Are Frequent Flyer Programs a Cause of the `Hub Premium'. Journal of Economics and Management Strategy 17, 35-66. |
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