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- W1562168712 abstract "This paper examines different schemes to attract air service to small markets through means such as direct subsidies, protected routes, and guaranteed revenue, including a travel bank. Direct social costs and underlying agency costs and social welfare gains are derived under a small network simulation model. A review of the literature on thin market intervention and agency considerations shows that it is somewhat uneven, but that three issues emerge: adverse selection, opportunism, and regulatory capture. The merits of the subsidy mechanisms are assessed with a simulation, with three alternative scenarios. The analysis shows that agency problems are reduced using versions of revenue guarantees as opposed to more traditional subsidies. Air travel banks seem appropriate for giving short-term confirmation of latent demand, though only one such bank is associated with a community that has been successful in retaining air service once the bank was depleted." @default.
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- W1562168712 date "2005-09-01" @default.
- W1562168712 modified "2023-09-26" @default.
- W1562168712 title "Small Market Air Service and Regional Policy" @default.
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