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.
Piermartini, Roberta, and Linda Rousová.
"The Sky Is Not Flat: How Discriminatory Is the Access to International Air Services?"
American Economic Journal: Economic Policy,
Trade Policy; International Trade Organizations
Economics of Regulation
Industry Studies: Utilities and Transportation: Government Policy
Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise