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The following model is used to explain pricing by the airline with the largest market share by US airport. MODEL: PDOM = ? + ?1*MSLGE

The following model is used to explain pricing by the airline with the largest market share by US airport. MODEL: PDOM = ? + ?1*MSLGE + ?2*MSSMALL + ?3*SMFARE + ?4*MILES.

Where:

PDOM = average fare of largest (in terms of market share) carrier.

MSLGE = market share of the largest airline or dominant carrier.

MSSMALL = market share of the low fare carrier.

SMFARE = average fare of the low fare carrier.

MILES = Distance of the route (proxy for cost factors).

I downloaded 5,569 observations by airport and estimated the above model.The Excel output is shown below:

image text in transcribed
D E SUMMARY OUTPUT Regression Stotistics Multiple # 0:90843 R Square 0.819604 Adjusted | 0.819674 Standard | 30.23731 Observati 5569 D ANOVA 55 MS F anticonce F Regression 4 23143971 5785993 6326.364 Residual 3564 5087138 914 2952 Total 5568 28231109 Coefficientandard Err t Stat P-volve Lower S50 Upper Intercept 63.5307 2.275234 27.93271 1.18.160 59.07036 67.59 MILGE 38.2098 2.56054 14 36168 5.926-46 32.99411 43.4 MSSMALL -89.3555 1.753881 -50.9473 0 -92 7938 -85.9 SMFARE 0.861938 0.006801 130.379 0 0.845998 0.874 MILES 0101073 0:000815 13.15869 5.76E-39 0.009131 0.012

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