M. Creel et M. Farell, Economies of scale in the US airline industry after deregulation: a Fourier series approximation, TRANSP R E, 37(5), 2001, pp. 321-336
Citations number
23
Categorie Soggetti
Politucal Science & public Administration","Civil Engineering
Journal title
TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW
This paper analyzes the cost structure of the US airline industry after der
egulation, finding that there exist economics of scale at moderate levels o
f output but that they die off at high levels. The cost-share system is est
imated using the Fourier functional form. The global approximation property
of the Fourier form allows consistent inference throughout the range of th
e data. The existence of economies of scale suggests that airlines will try
to grow to the efficient size. This conclusion is consistent with the evol
ution of the US airline industry in the last decade. (C) 2001 Elsevier Scie
nce Ltd. All rights reserved.