When the U.S. airline industry was deregulated, researchers have questioned whether the deregulation has ensured a truly

Question:

When the U.S. airline industry was deregulated, researchers have questioned whether the deregulation has ensured a truly competitive environment. If so, the profitability of any major airline would be related only to overall industry conditions (e.g, disposable income and market share) but not to any unchanging feature of that airline. This profitability hypothesis was tested using multiple regression (Transportation Journal, Winter 1990). Data for n = 234 carrier-years were used to fit the model
E(y) = β0 + β1x1 + β2 x2 + β3 x3 + .... + β30 x30

where

y = Profit rate

x1 = Real personal disposable income

x2 = Industry market share

x3 – x30 = Dummy variables 1coded 0–12 for the 29 air carriers investigated in the study

The results of the regression are summarized in the table. Interpret the results. Is the profitability hypothesis supported?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Statistics For Engineering And The Sciences

ISBN: 9781498728850

6th Edition

Authors: William M. Mendenhall, Terry L. Sincich

Question Posted: