Price Effects of Airline Mergers Through Network Changes

Presenter's Name(s)

Grant Hoffman

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

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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.