Price Effects of Airline Mergers Through Network Changes
Conference Year
2023
Abstract
This paper extends the models proposed in Hüschelrath and Müller (2014) and Brueckner et al. (1992) to analyze the effects of the Northwestern-Delta Airlines Merger of 2010 on airfares. The model proposed in this paper will test for the price effects of eigenvector centrality and market share as a merger is completed. Network centrality effects economies of density and indicates a negative relationship with price. The differences-in-differences regression with route and time fixed effects indicates eigenvector centrality and market share variables show decreases in prices as airports become more central.
Primary Faculty Mentor Name
Richard Sicotte
Status
Undergraduate
Student College
College of Arts and Sciences
Program/Major
Economics
Primary Research Category
Social Science
Price Effects of Airline Mergers Through Network Changes
This paper extends the models proposed in Hüschelrath and Müller (2014) and Brueckner et al. (1992) to analyze the effects of the Northwestern-Delta Airlines Merger of 2010 on airfares. The model proposed in this paper will test for the price effects of eigenvector centrality and market share as a merger is completed. Network centrality effects economies of density and indicates a negative relationship with price. The differences-in-differences regression with route and time fixed effects indicates eigenvector centrality and market share variables show decreases in prices as airports become more central.