Research


Working Papers

  • Who CARES? Airline Quality and the Aftermath of the CARES Act by Collin DeVore
    Full Paper (SSRN)
    Abstract

    Questions regarding the effectiveness of different subsidies, along with the efficiency and stability they may provide, have been researched widely within the field of economics. However, the effects that result from the conclusion of subsidization have received considerably less attention. As a case study, this analysis focuses on the CARES Act subsidy and its influence on the airline industry. The CARES Act, implemented in March 2020, provided funding for airlines amidst the COVID-19 pandemic. The funding consisted of a twenty-five billion dollar allotment from the government across all airlines, which was awarded based on the preceding year’s employment costs. This paper examines whether this act led to improvements in quality or productivity within the airline industry after the initial CARES Act shock subsided. Binary regression methods and on-time performance data are utilized to this end. Ultimately, I find that, by my most conservative estimates, the CARES Act’s resolution led to decreased quality, with a dip in worker productivity.

  • Asymmetric Price Adjustment to Regional Economic Fluctuations by Collin DeVore, Qi Ge, Minhae Kim, Myongjin Kim, and Nicholas G. Rupp
    Full Paper (SSRN)
    Abstract

    This paper examines how U.S. airlines adjust pricing in response to local economic fluctuations. Using data on route-level airfares and regional GDP growth, we document a clear asymmetry in price adjustment over local business cycles: fares fall in local downturns yet rise slowly in expansions. When separated by ticket type, one-way fares account for most of the asymmetry, while round-trip fares exhibit smaller responses. This asymmetry is concentrated among major carriers, which operate hub-and-spoke networks with sophisticated revenue management systems and greater exposure to cyclical business travel demand, while low-cost carriers show little asymmetric response. We further estimate a static oligopoly pricing model with differentiated products and recover implied marginal costs. We find that marginal costs do not vary systematically with local GDP growth, which rules out cost pass-through as the primary source of asymmetric pricing. Instead, our results favor demand-based mechanisms linked to changes in passenger composition and markups, as airlines reallocate seat inventory across consumer segments over the local business cycle.


Works in Progress

  • Network Dynamics in the US Airline Industry by Kasra Khademorezaian, Lei He, Collin DeVore, Georgia Kosmopoulou, and Myongjin Kim

  • Mergers, Subcontracting, and Pricing in the Airline Industry Collin DeVore, Georgia Kosmopoulou, and Myongjin Kim

  • Mergers, Network Structure, and Resilience by Collin DeVore, Georgia Kosmopoulou, and Myongjin Kim

  • Aircraft Leasing and Route Flexibility during Economic Shocks by Myongjin Kim and Collin DeVore