Estimating the impact of airport privatization on airline demand: A regression-based event study

Author(s)

Rolim, Paula S. W. ^[1] ; Bettini, Humberto F. A. J. ^{[2, 1]} ; Oliveira, Alessandro V. M. ^[1]

Affiliation

^[1] Ctr Transport Econ, Aeronaut Inst Technol, Sao Paulo - Brazil

^[2] Univ Sao Paulo, BR-05508 Sao Paulo - Brazil

• Document type: Journal article
• Source: JOURNAL OF AIR TRANSPORT MANAGEMENT; v. 54, p. 31-41, JUL 2016.
• Web of Science Citations: 3

Abstract

This paper develops an empirical model of passenger demand for routes of airports subject to either imminent or recent privatization. We investigate whether the privatization process produces a sequential impact over traffic. By employing a regression-based event methodology and controlling for fixed effects, price endogeneity and sample selection, we perform an econometric analysis of pre-privatization and post-privatization dynamic patterns of demand to infer the demand consequences of the major change in airport governance. We examine recent Brazilian airport privatization experience as a case. The main results suggest that privatization produced an overall increase in airline demand and that the airport notably recognized with the greatest demand potential and with the largest market penetration of a fast-growing low cost newcomer had the highest estimated ceteris paribus effect of privatization on demand. (C) 2016 Elsevier Ltd. All rights reserved. (AU)

• FAPESP's process: 13/14914-4 - Empirical assessment of competitive impacts of regulatory rules of airport slots redistribution
• Grantee: Alessandro Vinícius Marques de Oliveira
• Support Opportunities: Regular Research Grants