Assessing the Impact of the Covid-19 on the US Airline Market Using an Instrumental Variable and a DID Empirical Strategy

ABSTRACT

In this paper, we examine the affects of COVID-19 and related policies on the aviation industry. Using archival data from the John Hopkins Coronavirus Resource Center, Department of Transportation Statistics, and the COVID-19 U.S. State Policy database, and an instrumental variable and a difference-in-differences empirical strategy, we find that COVID-19 severity is negatively correlated with both the mean ticket price and the number of passengers for the four major airlines in the US, and that the implementation of COVID-19 control policies is positively correlated with the mean ticket price, while negatively correlated with the number of passengers. © 2022 ACM.