Question
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:
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