East-West Airlines' Sydney-Melbourne Service: Market Expansion or Demand Diversion? |
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| Authors: | PETER HARTLEY CHRIS TRENGOVE |
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| Institution: | Rice University and Centre of Policy Studies, Monash University, Clayton, Victoria 3168;Centre of Policy Studies, Monash University, Clayton, Victoria 3168 |
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| Abstract: | Data on 1278 flights on the East-West Airlines Sydney-Albury-Melbourne services, beginning when the Sydney-Melbourne excursion fare was first offered, are used to estimate three demand curves for the jointly provided services. The elasticities of demand for the Sydney-Melbourne service suggest it expanded the market as much as it attracted passengers from the trunk carriers. The econometric problem of joint estimation with censored dependent variables should be of general interest. |
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