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Title: An empirical evaluation of the effects of European public policies on island airfares
Author: Fageda, Xavier, 1975-
Jiménez González, Juan Luis
Valido, Jorge
Keywords: Transport aeri
Commercial aeronautics
Issue Date: Dec-2017
Publisher: Elsevier Ltd
Abstract: In this paper we estimate a pricing equation using data, at route and airline levels, for five European countries where a significant proportion of the territory is located on islands; France, Greece, Italy, Portugal and Spain. By using two complementary empirical strategies, instrumental variables and matching procedures, we find that the imposition of Public Service Obligations does not seem to be effective in reducing prices. Furthermore, we find that prices are higher on routes where only island residents enjoy subsidies, but not on routes where subsidies do not discriminate between residents and non-residents. Finally, prices seem to be higher on routes with flat rates in contrast to routes where subsidies to residents are made through fare discounts. Overall, the results of our analysis suggest the need to change policies in order to support air services to islands and to avoid distortions in the market fares offered by airlines.
Note: Versió postprint del document publicat a:
It is part of: Transportation Research Part A: Policy and Practice, 2017, vol. 106, num. December, p. 288-299
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ISSN: 0965-8564
Appears in Collections:Articles publicats en revistes (Econometria, Estadística i Economia Aplicada)

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