Fare determinants in air transportation: The role of market concentration and advance purchase
DOI:
https://doi.org/10.29105/trendinomics.v1i1.4Keywords:
concentration, airfares, advance purchaseAbstract
Objective: To analyze how market concentration and advance purchase affect domestic airfares in Mexico. Methodology: A dataset was compiled tracking ticket prices on six routes from Monterrey over 36 days. Herfindahl-Hirschman indices were calculated for each route. Multivariate regression models were estimated. Main results: Market concentration has a positive and significant effect on fares on business routes, but not on tourist routes. Advance purchase, on the other hand, has a negative impact on prices. Main contribution: The advance purchase variable is incorporated as a determinant of airfares in the Mexican market.
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