Scheduled service versus personal transportation: The role of distance

Bilotkach, Volodymyr, Fageda, Xavier and Flores-Fillol, Ricardo (2010) Scheduled service versus personal transportation: The role of distance. Regional Science and Urban Economics, 40 (1). pp. 60-72. ISSN 0166-0462

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Official URL: http://dx.doi.org/10.1016/j.regsciurbeco.2009.09.0...

Abstract

This paper presents a theoretical and empirical analysis of the relationship between frequency of scheduled transportation services and their substitutability with personal transportation (using distance as a proxy). We study the interaction between a monopoly firm providing a high-speed scheduled service and private transportation (i.e., car). Interestingly, the carrier chooses to increase the frequency of service on longer routes when competing with personal transportation because by providing higher frequency (at extra cost) it can also charge higher fares which can boost its profits. However, in line with the results of earlier studies, frequency decreases for longer flights when driving is not a viable option. An empirical application of our analysis to the European airline industry confirms the predictions of our theoretical model.

Item Type: Article
Uncontrolled Keywords: short haul routes, long haul routes, flight frequency, distance
Subjects: N100 Business studies
N800 Tourism, Transport and Travel
Department: Faculties > Business and Law > Newcastle Business School > Business and Management
Depositing User: Ay Okpokam
Date Deposited: 20 Dec 2011 09:42
Last Modified: 10 Aug 2015 11:04
URI: http://nrl.northumbria.ac.uk/id/eprint/4302

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