|Piermartini, Roberta and Rousova, Linda (14. July 2009): Free Sky and Clouds of Restrictions. Discussion Papers in Economics 2009-11|
An increasing percentage of trade occurs via air. However, air services are excluded from the WTO Agreement and, as a result, the aviation market is regulated by a plethora of Air Services Agreements. In this paper, we investigate the extent of discrimination -in terms of access to international air services- generated by this system. In particular, using recently available information on Air Services Agreements for 184 countries, we estimate the impact of international air services liberalization on air passenger flows. We find that increasing the degree of liberalization has a positive and significant effect. For instance, the higher degree of air services liberalization among countries of the European Economic Area (EEA) is estimated to account for approximately 30 per cent higher intra-EEA passenger traffic compared with countries that signed Open Skies-type agreements. Our results are robust to the use of several measures of liberalization as well as alternative estimation techniques that address potential problems of endogeneity, heteroscedasticity and data inaccuracy.
|Item Type:||Paper (Discussion Paper)|
|Keywords:||Air Services Agreements; Air services liberalization; Air passenger traffic; Regulatory quality.|
Economics > Discussion Papers in Economics
Economics > Discussion Papers in Economics > International Trade
|Subjects:||300 Social sciences > 300 Social sciences, sociology and anthropology|
300 Social sciences > 330 Economics
|JEL Classification:||F15, L93, R48|
|Deposited On:||15. Jul 2009 07:02|
|Last Modified:||27. Nov 2013 14:55|
Anderson, J. E., van Wincoop, E., 2003. Gravity with gravitas: A solution to the border puzzle. American Economic Review 93 (1), 170–192.
Cameron, A. C., Trivedi, P. K., 1998. Regression analysis of count data. Econometric Society Monographs No. 30, Cambridge University Press.
CEPII, 2008. Geodesic distances. Available at http://www.cepii.fr/anglaisgraph/bdd/distances.htm.
Doove, S., Gabbitas, O., Nguyen-Hong, D., Owen, J., 2001. Price effects of regulation: Telecommunications, air passenger transport and electricity supply. Productivity commission staff research paper, Aus- Info, Cranberra.
Geloso Grosso, M., 2008. Liberalising air transport services in APEC. GEM Working Paper.
Gönenç, R., Nicoletti, G., 2000. Regulation, market structure and performance in air passenger transportation. OECD Economics Department Working Papers 254, OECD, Economics Department.
Hanlon, P., 2006. Global Airlines: Competition in a Transnational Industry, 3rd Edition. A Butterworth-Heinemann Title, Elsevier.
Herander, M. G., Saavedra, L. A., 2005. Exports and the structure of immigrant-based networks: The role of geographic proximity. The Review of Economics and Statistics 87 (2), 323–335.
Härdle, W., Simar, L., 2007. Applied Multivariate Statistical Analysis, 2nd Edition. Springer.
Hummels, D., 2007. Transportation costs and international trade in the second era of globalization. Journal of Economic Perspectives 21 (3), 131–154.
ICAO, 2005. Database of the world’s air services agreements(WASA). 2005 edition, CD room.
Micco, A., Serebrisky, T., 2006. Competition regimes and air transport costs: The effects of open skies agreements. Journal of International Economics 70 (1), 25–51.
Nicoletti, G., Scarpetta, S., Boylaud, O., 2000. Summary indicators of product market regulation with an extension to employment protection legislation. OECD Economics DepartmentWorking Papers 226, OECD, Economics Department.
OECD, 2000. OECD workshop on principles for the liberalization of air cargo transportation: Principles for the liberalization of air cargo. Available at: http://www.oecd.org/dataoecd/7/9/1806687.pdf.
Rauch, J. E., Trindade, V., 2002. Ethnic chinese networks in international trade. The Review of Economics and Statistics 84 (1), 116–130.
Silva, J. M. C. S., Tenreyro, S., 2006. The log of gravity. The Review of Economics and Statistics 88 (4),641–658.
World Bank, 2008. World bank income classification. Available at http://siteresources.worldbank.org/ DATASTATISTICS/Resources/OGHIST.xls.
WTO, 2006. Second review of the air transport annex, Developments in the air transport sector(part two), Quantitative Air Services Agreements review (QUASAR). Volumes I and II, Document S/C/W/270/Add.1.
WTO, 2007. Second review of the air transport annex, Developments in the air transport sector (part three), Quantitative Air Services Agreements review (QUASAR). Document S/C/W/270/Add.2.