Welfare implications for air passengers in China in the era of high-speed rail

Yang, Hangjun and Ma, Wenliang and Wang, Qiang and Wang, Kun and Zhang, Yahua ORCID: https://orcid.org/0000-0003-1522-3402 (2020) Welfare implications for air passengers in China in the era of high-speed rail. Transport Policy, 95. A1-A13. ISSN 0967-070X

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Abstract

Despite facing the rapid expansion of high-speed rail (HSR) services, China’s airline industry has experienced substantial growth in the last decade. Using panel data from 2007 to 2016, this paper assesses the welfare changes for both economy- and business-class air passengers in China due to the HSR entry. We found that the demand for air travel is inelastic and that the HSR entry has led to significant welfare changes for air passengers. Specifically, air passengers in the short-distance markets were worse off, largely driven by a dramatic cut in flight frequency. However, over time, their welfare could improve when flight frequencies were restored. In contrast, in the medium- and long-distance markets, air passengers could be better off immediately after the HSR entry, thanks to the lower airfare and insignificant drop in flight frequency. However, a reduction in welfare was observed in the long run, after airlines gradually reduced the flight frequency.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce (1 July 2013 -)
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce (1 July 2013 -)
Date Deposited: 15 Sep 2020 04:40
Last Modified: 30 Sep 2020 03:01
Uncontrolled Keywords: Airline competition; high-speed rail; welfare analysis; business class; economy class
Fields of Research (2008): 15 Commerce, Management, Tourism and Services > 1507 Transportation and Freight Services > 150701 Air Transportation and Freight Services
14 Economics > 1402 Applied Economics > 140209 Industry Economics and Industrial Organisation
14 Economics > 1402 Applied Economics > 140217 Transport Economics
Socio-Economic Objectives (2008): B Economic Development > 88 Transport > 8803 Aerospace Transport > 880302 Air Passenger Transport
Identification Number or DOI: 10.1016/j.tranpol.2020.04.007
URI: http://eprints.usq.edu.au/id/eprint/39566

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