An econometric study of the effects of airport privatization on airfares in Brazil

Author(s)

Brito, Igor R. S. ^[1] ; Oliveira, Alessandro V. M. ^[1] ; Dresner, Martin E. ^[2]

Affiliation

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

^[2] Univ Maryland, Robert H Smith Sch Business, College Pk, MD 20742 - USA

• Document type: Journal article
• Source: TRANSPORT POLICY; v. 114, p. 338-349, DEC 2021.
• Web of Science Citations: 0

Abstract

This paper develops empirical models to test the impact of airport privatization on airline fares. We employ a difference-in-difference approach combined with an endogenous switching regression model to account for the selection of airports to be privatized. The results suggest that prices for tickets on routes with at least one privatized airport at an endpoint are about 3-3.5% higher than on routes between two publicly managed airports. By testing moderating effects, we find evidence that market dominance enforces the privatization impact on airfares. The main conclusions are consistent using various control group classifications. (AU)

• FAPESP's process: 15/19444-1 - Airline emission charges: an econometric model to investigate their potential effects on the Brazilian air transport industry
• Grantee: Alessandro Vinícius Marques de Oliveira
• Support Opportunities: Regular Research Grants
• FAPESP's process: 20/06851-6 - Study of air travel demand during economic crises using sparse high-dimensional econometric models and non-traditional covariates
• Grantee: Alessandro Vinícius Marques de Oliveira
• Support Opportunities: Regular Research Grants