This website uses cookies to ensure you have the best experience. Learn more

Summary Of The Article Written By Joanna Stavins

624 words - 3 pages

Summary of the article written by Joanna Stavins,
Price Discrimination in the Airline Market: The Effect of Market Concentration

The article is based on the assumption of the price discrimination increases with the competition in the airline market.
Introduction:
The relationship between price discrimination and market concentration has already been studied by Dana (1998) and Gale&Holmes (1993); the first states that PD1 could be present even if MC2 is low and there is no particular strength of a carrier. Gale&Homes point out that monopoly airline may want to avoid all those customers with high valuation of time.
Purchase discount and Saturday-night stayover are the more used techniques to price discriminate the airline market.
The model implemented calculates the differences in marginal effects of ticket restriction over the main routes characterized by different levels of MC.
A negative effect of MC on price dispersion has been discovered by Borenstein and Rose ...view middle of the document...

To test for robustness, we use two different ticket restrictions in the estimation, and both deliver the same results.
The restriction that could be attached are:
1. Cancellation Penalty
2. Number of Days in Advance that Purchase is Required
3. Saturday Night Stayover Required or Not
4. Other (Unspecified)
To avoid multicollinearity, one restriction at a time was included in the estimation, according to Dana and Gale&Holmes, the restriction number 2 and 3 were used as proxies for price discrimination.
The number of passenger is not included in the data, so, in order to carry out each carrier’s market share and the Herfindahl-Hirschman index (HHI) the number of passenger has been substituted with the numbers of route.
Model:
Two different equations have been estimated, leading to a reduced-form regression model.
The first equation doesn’t show any interaction between restriction and concentration while the second one allows for a separate effect of the restriction-concentration interaction on airfares.
lnPijk=β0+β1Rijk+β2HHIi+β3Sij+β4DISTi+β5DISTSQi+β6AVGPOPi+β7AVGINCi+β8TEMPi+β9HUBij+β10SLOTSi+β11ONEWAYijk+β12DIRECTij+β13FIRSTijk+β14DAYSijk+ϵijk
In both equations
* i denotes route
* j denotes carrier
* k is a particular ticket for the carrier on the route
* DIST and DISTQ are the distance between two endpoints and the distance squared
* AVGPOP is the avg population and AVGINC is average per capita income
* TEMP is the difference in mean January temperatures between the origin and the destination
* HUB is boolean variable, 1 if carrier has a hub and 0 if not
* SLOTS is boolean variable, 1 if the number of takeoff and landing slots at either airport is regulated
* ONEWAYis boolean variable equal to 1 for one-way ticket
* DIRECT is a boolean variable equal to 1 for direct flights
* FIRST is a boolean variable equal to 1 for first class flights
* DAYS indicates the number of days prior to departure that the fare was last offered
The second equation is the following
lnPijk=α0+Rijk(γ0+γ1HHIi)+α1HHIi+α2Sij+α3DISTi+α4DISTSQi+α5AVGPOPi+α6AVGINCi+α7TEMPi+α8HUBij+α9SLOTSi+α10ONEWAYijk+α11DIRECTij+α12FIRSTijk+α13DAYSijk+νijk

From this equation we get price discrimination estimated as:
∂P∂R= γ0+γ1HHIiP

Other assignments on Summary Of The Article Written By Joanna Stavins

Summary Of The Euro Crisis – Overview Of Events Till Date

1010 words - 5 pages SUMMARY OF THE EURO CRISIS – OVERVIEW OF EVENTS TILL DATE The Euro Crisis had its making in the US financial crisis of 2008-09. Before 2008, Euro Zone nations had been borrowing indiscriminately owing to low interest bonds available due to being part of Euro Zone. Also, they were banking on their high growth rates to pay back those loans. However, as a result of US financial crisis, growth slowed down, resulting in slowing down of tax

A Summary Of “Facing Poverty With A Rich Girl’S Habits” By Kim

709 words - 3 pages A Summary of “Facing poverty with a rich girl’s habits” by Kim Strayer University English Composition April 17, 2016 A Summary of “Facing Poverty with a Rich Girl’s Habits” by Kim This is a brief summary of Suki Kim’s essay, “Facing Poverty with a Rich Girl’s Habits” in which she reveals how she came from riches to rags. Beginning with how she grew up in an ugly house in Queens, New York in the 80’s, which

Challenging The Code Of Change By Nigel Leppitt

8380 words - 34 pages Journal of Change Management Vol. 6, No. 3, 235 –256, September 2006 Challenging the Code of Change: Part 2. Crossing the Rubicon: Extending the Integration of Change NIGEL LEPPITT Haldane Associates, Middlesex ABSTRACT It has been argued that the two most common approaches to change management adopted by organizations, Theory E and Theory O, represent an inefficient dichotomy and integrating elements of both into any change initiative

Explain How The Character Of Sheila Birling Is Changed By The Inspector’S Visit. (400 Words)

452 words - 2 pages Explain how the character of Sheila Birling is changed by the Inspector’s visit. (400 words) Written in 1945, An Inspector calls was set to be in 1912 by J.B Priestly who was born in 1894. J.B Priestly wanted to show people how life was like when class divisions looked down on each other and how politics played a big role in the society. In Act I, Sheila Birling was celebrating her engagement to Gerald Croft over a dinner with her family

The Performance Was Put On By The Gospel Choir Of Ncsu

319 words - 2 pages The performance was put on by the gospel choir of NCSU, and they were accompanied by a keyboardist, two guitarists, and a drummer. The lead guitarist was a good player, as well as the keyboard player (I hope to be there one day). Early on the audience section wasn't very full, but as things began to get started some late comers filtered in. The choir director encouraged the audience to participate in the performance rather than simply

The Main Contemporary Issue Faced By Manager With The Expansion Of Technology

2317 words - 10 pages The Main Contemporary Issue faced by Manager with the expansion of Technology Introduction In many industries, superior technology integration - the approach used to choose and refine the technologies employed in a new product, process, or service - is the key to achieving superior productivity and speed, and superior products. Access to great research is still immensely important, but if a company selects technologies that don't work well

Posithis Article Will Look At Organ Transplant And The Role It Has And Is Playing Out In Our Society: Will Also Look At The Cost Of This Procedures And Who Is Most Likely To Receive An Organ. We Will...

314 words - 2 pages This article will look at organ transplant and the role it has and is playing out in our society: will also look at the cost of this procedures and who is most likely to receive an organ. We will also look at how this procedure is done and if it is done in accordance with medial guidelines as well as how many are done on a monthly basis and who qualifies for that organ. Organ donation has become very important for people who have organ problems

Reaction To The Reading Of "A Rose For Emily" By William Faulkner

783 words - 4 pages My Reaction to Reading "A Rose for Emily" July 13, 2011 My Reaction to Reading "A Rose for Emily" “A Rose for Emily” was written by William Faulkner and is set shortly after the Civil War. In this paper I believe that Faulkner was trying to create a story about a woman in love that wanted a family and a normal life. When she does find a man that she believes could give her the life she has been longing for she also finds that he does not

A Universe Lies On The Sidewalks Of New York- By Steven Doloff

369 words - 2 pages A Universe Lies on the Sidewalks of New York- by Steven Doloff In this essay, Steven Doloff talks about the items he finds on the various sidewalks of New York and the people who leave these items. He starts by giving examples of the dozens of gun bullets and bullet shells he picked up from the sidewalks in his neighborhood. He says how in a decade, he has collected “mashed 0.45 caliber slugs, little 0.25 caliber shells, and an inch- long snub

Cite An Example From Recent Events That Highlights The Flattening Of The World As Described By Friedman

413 words - 2 pages are not as relevant as they once were, seeing as how today’s firms can sustain or increase their competitiveness simply by implementing cost-effective measures such as purchasing cheaper goods or hiring a cheaper labor force in foreign markets. One of the most notable statements made by Friedman is that any work that can be digitized will flow to those who are best able to do it. This couldn’t be closer to the truth considering the occurrences

Political Corruption Is The Abuse Of Entrusted Power By Political Leaders For Private Gain, With The Objective Of Increasing Power Or Private Wealth. It Need Not Involve Money Changing Hands; It May...

1542 words - 7 pages simultaneity of attaining growth and social justice. These targets are variously manifested in different sectors and quarters of the beneficiaries of growth and development. In this perspective, various comparative works in the literature are invoked toward establishing the essential national wellbeing for alleviating poverty. Wellbeing is established by participative complementarities between economic growth and social justice and their

Similar Documents

The Article By Carol Wolf Essay

511 words - 3 pages The article by Carol Wolf, “What If They Built a Toll Road and No One Came?” (AN: 63168833), is about the public Indiana toll road being sold to a private corporate investment group in the hopes that it would ease the financial debt of the state. According to the abstract accompanying the article, “The article discusses the Indiana Toll Road, which is managed by a group of corporate investors instead of the state of Indiana. The road, which

Summary Of The Auditor Essay

1585 words - 7 pages Summary of The Auditor The Auditor by James K. Loebbecke tells a story about the life and career of an auditor named Jack Butler. The book shows Jack’s career from his education all the way to his promotion to partner. Loebbecke designed this story about Jack as a teaching tool to give students an understanding about the life of an auditor. The story begins with Jack’s promotion to partner and how it was bittersweet for him. Jack is

Article 92 Of The Ucmj Essay

666 words - 3 pages 23 January 2005 Article 92 The text definition of Art. 92 is: “Any person subject to this chapter who— (1) violates or fails to obey any lawful general order or regulation; (2) having knowledge of any other lawful order issued by a member of the armed forces, which it is his duty to obey, fails to obey the order; or (3) is derelict in the performance of his duties; shall be punished as a court-martial may direct

Platos Summary Of The Cave Essay

713 words - 3 pages ignorance of the philosopher’s teachings. The philosopher’s teachings are attempts to enlighten the prisoners who are bound by chains so they can vicariously experience the true good in the world. Socrates, in this conversation with Glaucon, paints a picture describing a world where people are born as chained prisoners that are forced to stare at a cave wall their entire life. Moreover, there is a fire shining behind them that reflects onto the cold