PASSENGER OUTPUT AND LABOR PRODUCTIVITY IN THE US AIRLINE INDUSTRY AFTER DEREGULATION - A PROFIT FUNCTION-APPROACH

This study examines passenger output and labor productivity in the US airline industry after deregulation using a generalized puss normalize d quadratic profit function. Specifically, various elasticity estimate s of passenger output and employee numbers. with respect to the number of airplanes, are derived during the post-deregulation period. The em pirical results provide evidence on the differing ability of airlines to enhance their passenger output and alter employment numbers after d eregulation. Our findings, combined with other empirical studies on pr oductivity of the domestic airline industry. point to the complex effe cts of deregulation on the airline industry and public policy toward t he industry in the future.