Abstract

http://ssrn.com/abstract=1160269
 
 

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Intermodal Competition in the Brazilian Interstate Travel Market


Frederico Araújo Turolla


Fundação Getúlio Vargas

Moisés Diniz Vassallo


Aeronauthical Institute of Technology - Center for Studies of Airline Regulation and Competition

Alessandro V. M. Oliveira


Aeronautics Institute of Technology

2008

Revista de Analisis Economico, Vol. 23, No. 1, pp. 21-33, June 2008

Abstract:     
This paper presents a test of intermodal interaction between coaches and airlines in Brazil in order to check for the efficacy of recent liberalization measures designed to promote competition in both industries. Interstate travel service in the country is heavily provided by coaches, and the system is fully operated by the private sector under public delegation through permits and authorizations. Agency-based regulation was introduced in 2002 along with a price cap regime aimed at enhancing the flexibility to change fares in response to demand and cost conditions. By making use of a reaction function-based model of coach operators' pricing decisions in the interstate travel market, we then estimate the sensitivity of the changes in coach fares to the changes in airline fares in a simultaneous-equation framework. Intermodal interaction among coach operators and airlines is found to be highly significant and probably due to the competition for a small but increasing set of premium, quality-sensitive, coach passengers.

Number of Pages in PDF File: 13

Keywords: Air Transportation, Coaches, Industrial Organization, Econometrics

JEL Classification: L90, C33

Accepted Paper Series


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Date posted: July 16, 2008 ; Last revised: October 29, 2012

Suggested Citation

Araújo Turolla, Frederico and Vassallo, Moisés Diniz and Oliveira, Alessandro V. M., Intermodal Competition in the Brazilian Interstate Travel Market (2008). Revista de Analisis Economico, Vol. 23, No. 1, pp. 21-33, June 2008. Available at SSRN: http://ssrn.com/abstract=1160269

Contact Information

Frederico Araújo Turolla (Contact Author)
Fundação Getúlio Vargas ( email )
R. Dr. Neto de Araujo 320 cj 1307
Vila Mariana
Rio de Janeiro, Rio de Janeiro 22250-900
Brazil
Moisés Diniz Vassallo
Aeronauthical Institute of Technology - Center for Studies of Airline Regulation and Competition ( email )
Av. Escola Politécnica 2.200, AP 73
Bloco Itália - Jaquaré
Sao Paulo
Brazil
Alessandro Vinícius Marques de Oliveira
Aeronautics Institute of Technology ( email )
Praça Marechal Eduardo Gomes, 50
São José dos Campos, 12.228-900
Brazil
HOME PAGE: http://www.ita.br
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