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American Economic Journal: Economic Policy: Vol. 5 No. 3 (August 2013)

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The Sky Is Not Flat: How Discriminatory Is the Access to International Air Services?

Article Citation

Piermartini, Roberta, and Linda Rousová. 2013. "The Sky Is Not Flat: How Discriminatory Is the Access to International Air Services?" American Economic Journal: Economic Policy, 5(3): 287-319.

DOI: 10.1257/pol.5.3.287

Abstract

Using information on 2,300 Air Services Agreements covering 184 countries, we investigate the impact of air services liberalization on passenger flows. We find that a certain level of liberalization is required to have a positive effect on passenger traffic. In particular, we estimate that the multilateralization of multiple designation provisions, Open Skies Agreements and European Economic Area-type agreements would increase passenger traffic worldwide by 0.5, 5, and 10 percent, respectively. The potential endogeneity problem is carefully dealt with using instrumental variables and propensity score matching.

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Authors

Piermartini, Roberta (WTO)
Rousová, Linda (European Central Bank)

JEL Classifications

F13: Trade Policy; International Trade Organizations
L51: Economics of Regulation
L93: Air Transportation
L98: Industry Studies: Utilities and Transportation: Government Policy
R41: Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise

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