Abstract
This dissertation uses industrial organization and econometric techniques in the analysis of transportation issues. The first chapter, titled “The Impact of Regional Jets on Airline Networks” examines the impact of a new technology, in the form of regional jets, on the US airline industry. Similar to large jets, Regional Jets have a lower threshold for providing profitable service. The chapter develops a theoretical framework that predicts passengers with high schedule-delay costs (i.e., business travelers) would take a direct flight that uses a regional jet. Data from 1997 to 2005 are then analyzed to see the impact of regional jet use on hub-spoke and point-to-point service. The second chapter, “Factors that Affect Airline Flight Frequency and Aircraft Size,” assesses the determinants of aircraft size and frequency of flights on airline routes by considering market demographics, airport characteristics, airline characteristics, and route characteristics. The chapter shows that frequency and aircraft size increase with population, income, and runway length. An increase in the proportion of managerial workers in the labor force or the proportion of population below the age of 25 results in greater frequency with the use of small planes. Slot constrained airports and an increase in the number of nearby airports lead to lower flight frequency with the use of smaller planes. Hubs and low cost carriers are associated with larger plane sizes and higher frequency, while regional airline ownership leads to higher frequency and the use of smaller planes. An increase in distance between the endpoints leads to lower frequency with the use of larger planes. As airport delay rises, airlines reduce frequency and use smaller planes, though when airport cancellations rise, flight frequency increases with the use of larger planes. This finding suggests airlines utilize frequency and aircraft size to hedge against flight cancellations. The third chapter, titled “Road Congestion Tolling under Competition,” introduces a tolled road that congests the un-tolled alternative to the model proposed by Verhoef, Nijkamp and Rietveld (1996) and analyzes the toll and welfare outcomes under a social planner’s prospective.