How consumers might switch from gasoline and diesel to alternative energy sources is not known, since the availability of alternatives is currently very limited. To bridge this gap, we exploit exogenous variation in ethanol prices at Brazil's pumps and uncover substantial consumer heterogeneity...

This article introduces a method to quantify the effect of a firm’s strategic choices on the risk profile of its profits at different horizons. We combine a demand system for differentiated products with counterfactual paths of risk factors. Prices, costs and quantities respond endogenously to...

We examine the effects of entry on the pricing of legacy airlines facing a rapidly expanding low-cost newcomer. We estimate the timing and the determinants of responses allowing for asymmetry and product differentiation. We propose a decomposition procedure of time fixed-effects to control for...

This paper proposes and implements a parsimonious three-factor model of the term structure whose dynamics is driven uniquely by observable state variables. This approach allows comparing alternative views on the way state variables – macroeconomic variables, in particular – influence the...

This paper investigates business traveller heterogeneity using data from a survey carried out amongst airline passengers. Traditional methods employed are usually based on mean responses, thus providing an incomplete picture of what business travellers perceive to be the main sources of...

This paper empirically investigates price reactions to the entry of the low-cost carrier Gol Airlines in the Brazilian domestic market in 2001. Given the substantial reduction in unconditional yields of the incumbent airlines on routes actually entered by Gol, we perform an econometric analysis...

The wave of airline deregulation has brought out a worldwide phenomenon: low-cost carriers. A recent case is that of Brazil where after 3 years of operation Gol has 20% of the domestic market. The paper investigates whether there is a significant distinction between the market segment of...