Philippe Barla

Firm size inequality and market power

Abstract In this paper we reexamine the relationship between firm size inequality (FSI) and market power in light of modern oligopoly theory. Using a model with capacity constraints and endogenous conduct, we show that the market power–FSI relationship is more complex than the positive link traditionally predicted. We show that two separate effects are at work, leading to a U-shaped relationship between market power and FSI. We also show that prices should be more unstable in markets where FSI is high. We test these predictions on data for the U.S. airline industry and find results that support them.

Airline network structure under demand uncertainty

In this paper, we provide another reason that may explain the adoption of the hub-and-spoke network structure in the airline industry. We show that when an airline has to decide on its capacity before the demand conditions are perfectly known, a hub-and-spoke (h&s) network structure by pooling passengers from several markets into the same plane helps the firm to lower its cost of excess capacity in the case of low demand and to improve its capacity allocation in the case of high demand.

Strategic interactions and airline network morphology under demand uncertainty

Abstract In this paper, we examine how strategic interactions affect airline network under demand uncertainty. We develop a three-stage duopoly game: at stage 1 airlines determine their network structure (linear versus hub-and-spoke); at stage 2 they decide on their capacities; at stage 3 firms compete in quantities. The main feature of the model is that firms have to decide on network structure and capacities while facing demand uncertainty. We show that while hubbing is efficient, airlines may choose a linear network for strategic reasons. Furthermore, we show that this structure softens competition by preventing contagion of competition across markets.

Simultaneous Modeling of Endogenous Influence of Urban Form and Public Transit Accessibility on Distance Traveled

This paper describes an attempt to understand better the endogenous relationships between urban form, accessibility to public transit, and daily travel distance. A model of two simultaneous equations was implemented. The model took into account the interaction between the ownership of vehicles and the choice of household location as explanatory endogenous variables for total distance traveled by respondents. Choice of household location was defined on the basis of cluster analysis (neighborhood typology) driven by land use mix, population density, and accessibility to transit. With socioeconomic variables controlled for, the impacts of neighborhood typologies combined with car ownership levels as endogenous choices were estimated with the use of a model with simultaneous equations. This research used data from the Quebec City, Quebec, Canada, origin–destination survey conducted in 2001. The data set included responses from more than 50,000 individuals. Among other results, the presence of endogeneity was confirmed. When endogeneity was not taken into account, the joint effects of car ownership and household location choices were underestimated. According to the model with simultaneous equations, the total distance traveled by individuals was primarily influenced by employment status and household structure. In fact, the total distance per individual had an average rate of growth of 50% when the individual was working full-time. The distance also increased by 5.7% per child and decreased by 2.4% per person. Although the elasticities of urban form and transit supply variables introduced individually into the model were small, the elasticities of neighborhood type as endogenous variables were much more relevant.

Information Technology and Efficiency in Trucking

In this paper, we develop an econometric model to estimate the impacts of Electronic Vehicle Management Systems (EVMS) on the load factor (LF) of heavy trucks using data at the operational level. This technology is supposed to improve capacity utilization by reducing coordination costs between demand and supply. The model is estimated on a subsample of the 1999 National Roadside Survey, covering heavy trucks travelling in the province of Quebec. The LF is explained as a function of truck, trip and carrier characteristics. We show that the use of EVMS results in a 16 percentage points increase of LF on backhaul trips. However, we also find that the LF of equipped trucks is reduced by about 7.6 percentage points on fronthaul movements. This last effect could be explained by a rebound effect: higher expected LF on the returns lead carriers to accept shipments with lower fronthaul LF. Overall, we find that this technology has increased the tonne-kilometers transported of equipped trucks by 6.3% and their fuel efficiency by 5%.

Disaggregated Empirical Analysis of Determinants of Urban Travel Greenhouse Gas Emissions

A disaggregate approach is proposed for estimating travel-related greenhouse gas (GHG) emissions at the individual level by using an in-depth multiday activity-based survey in Quebec City, Canada. A random-effect model is then estimated to quantify the impact on emissions of individual and household socioeconomic characteristics as well as urban form and transit supply indicators. The model results are obtained in terms of total individual emissions and by trip-end activity purpose such as work, leisure, and shopping. According to the results, female respondents produced, on average, emissions that were 22% lower than those of men. Evidence of economies of scale was found within households in the production of travel GHG emissions. A couple would produce only 64% more emissions than a single person. It was found that both urban form and transit supply around the residence have a significant impact on GHG emissions, though this impact is relatively limited; this finding implies that drastic land use changes would be required to significantly cut travel emissions. For example, a 10% increase over the mean in residential or job density would lower emissions by less than 2%. This result is consistent with recent studies examining the relationship between travel and land use.

Pricing and Deregulation in the Airline Industry

Structural shifts are an important source of knowledge for economists, though unfortunately they are relatively rare. It is therefore no surprise that an event such as deregulation in the airline industry has given rise to literally hundreds of studies. Much has been learned about how airline markets and markets in general work. Studies have looked at the impact of deregulation on various aspects of airline strategies. Pricing is probably the aspect that has been most studied. in this paper, we review some of the evidence on the impact of deregulation on fares. We also review what has been learned about pricing in a deregulated environment. Given the volume of papers on the subject, this review can only be partial. Since there is no obvious or unique way to limit the scope of such a review, our choices are therefore subjective and thus contestable.

Urban Transportation Greenhouse Gas Emissions and Their Link with Urban Form, Transit Accessibility, and Emerging Green Technologies: Montreal, Quebec, Canada, Case Study

A greenhouse gas (GHG) emissions inventory is estimated at the household level from disaggregated trip data considering all emitting modes. Trip-level GHG emissions are estimated by combining data sources (e.g., origin–destination surveys, vehicle fleet characteristics, transit rider ship data) and by using modeling tools (traffic assignment and GHG models) developed for Montreal, Quebec, Canada. A simultaneous equation model framework is implemented to investigate links between urban form, transit supply, sociodemographics, and travel GHGs, taking into account the issue of residential self-selection. The potential impacts of land use and transit supply strategies with emerging green technology scenarios are then compared with each other. Findings are consistent with the literature; built environment attributes are statistically significant (10% increase in density, transit accessibility, and land use mix results in 3.5%, 5.8%, and 2.5% GHG reductions, respectively), and the number of workers and retirees make important contributions to GHG emissions at the household level (102% increase from adding one worker and 51% decrease from adding one retiree). Also, if the current transit fleet were replaced with electric trains and hybrid buses, transit GHGs would decrease by 32%. If current trends persist in the private motor vehicle fleet, continued improvements in car fuel economy are estimated to reduce car GHGs 7% by 2020. The two most effective strategies for reducing regional and household GHGs appear to be to improve the fuel efficiency of the private motor vehicle fleet and to increase transit accessibility.

Comment on “Costs and Benefits of Quebec's Drive Electric Program”

Dans cet article, je réexamine les résultats de l’analyse coûts-bénéfices du programme Roulez électrique du gouvernement du Québec réalisée par Mercier, Lanoie et Leroux et publiée dans cette revue en 2015. Mes résultats montrent que, quand on tient compte des coûts additionnels des véhicules électriques par rapport aux véhicules conventionnels, le programme conduit à une valeur actualisée nette négative.

Automobile Fuel Efficiency Policies with International Innovation Spillovers

In this paper, we explore automobile fuel efficiency policies in the presence of two externalities i) a global environmental problem and ii) international innovation spillovers. Using a simple model with two regions, we show that both a fuel tax and a tax on vehicles based on their fuel economy rating are needed to decentralize the first best. We also show that if policies are not coordinated between regions, the resulting gas taxes will be set too low and each region will use the tax on fuel rating, to reduce the damage caused by foreign drivers. If standards are used instead of taxes, we find that spillovers may alleviate free-riding. Under some conditions, a strict standard in one region may favour the adoption of a strict standard in the other one.