Open Skies Over the Middle East

37 Pages Posted: 20 Apr 2016

See all articles by Anca D. Cristea

Anca D. Cristea

University of Oregon - Department of Economics

Russell H. Hillberry

University of Melbourne - Department of Economics; World Bank - Development Research Group (DECRG)

Aaditya Mattoo

World Bank - Development Research Group (DECRG)

Multiple version iconThere are 2 versions of this paper

Date Written: June 1, 2014

Abstract

The dynamism of air traffic markets in the Middle East obscures the persistence of restrictions on international competition. But how important are such restrictions for passenger traffic? This paper uses detailed data on worldwide passenger aviation to estimate the effect of air transport policy on international air traffic. The policy variable is a quantitative measure of the commitments under international agreements. The paper analyzes, for the first time, not only bilateral agreements, but also plurilateral agreements such as the one between Arab states. The analysis finds that more liberal policy is associated with greater passenger traffic between countries. Higher traffic levels appear to be driven primarily by larger numbers of city pairs being served, rather than by more passengers traveling along given routes. To demonstrate the quantitative implication of the estimates, two liberalization scenarios in the Middle East are evaluated. Deepening the plurilateral agreement among Arab states would lead to a 30 percent increase in intraregional passenger traffic. Widening the agreement to include Turkey would generate significantly larger gains because current policy vis-?-vis Turkey is much more restrictive.

Keywords: Transport Economics Policy & Planning, Airports and Air Services, Roads & Highways, Public Sector Corruption & Anticorruption Measures, Air Quality & Clean Air

Suggested Citation

Cristea, Anca D. and Hillberry, Russell H. and Mattoo, Aaditya, Open Skies Over the Middle East (June 1, 2014). World Bank Policy Research Working Paper No. 6937. Available at SSRN: https://ssrn.com/abstract=2458725

Anca D. Cristea (Contact Author)

University of Oregon - Department of Economics ( email )

1245 University of Oregon
Eugene, OR 97403
United States

Russell H. Hillberry

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Aaditya Mattoo

World Bank - Development Research Group (DECRG) ( email )

1818 H Street, N.W.
Room MC 3-327
Washington, DC 20433
United States
202-458-8047 (Phone)
202-676-9810 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/amattoo

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