Structural econometric analysis of competitive conduct: a case study of air transportation in Brazil

Análise econométrica estrutural da conduta competitiva: estudo de caso do transporte aéreo pós-liberalização

The present work aims at studying the competitive conduct of Brazilian airlines on the main routes within the country by using a theoretical model of competition and parametric estimation. The methodology consists of an empirical model of supply and demand which permits the estimation of a parameter indicative of firms' conduct in the market, and therefore to test if it is a cooperative situation (cartel rationality) or a non-cooperative situation (competitive market). Moreover, this research aims at incorporating a refinement by using a resampling method called Bootstrap. With bootstrapping, it is possible to compute more accurate measures of the standard deviation of estimates and therefore to have more reliable tests of hypotheses on firms' conduct. Results indicated the non rejection of the non-cooperative conduct among firms, meaning the absence of evidence of coordination. Additionally, an episode of exchange rate devaluation in 2002 did not have any effect of soothing competition in the market; on the contrary, it intensified the competitive conduct of firms.

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  • Supplemental Notes:
    • Abstract used with permission of the Brazilian Transportation Planning Society (BTPS)
  • Authors:
    • Lovadine, Débora
  • Publication Date: 2009-1


  • English
  • Portuguese

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  • Accession Number: 01495781
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Oct 2 2013 11:42PM