1 THE EFFECT OF AIRLINE DEREGULATION ON AUTOMOBILE FATALITIES

This paper attempts to quantify the effects of airline deregulation in the United States on intercity automobile travel and consequently on the number of highway fatalities. A demand model is constructed for auto travel which includes variables representing the price and availability of air service. A reduced form model of the airline market is then estimated. Finding that deregulation has decreased airfares and increased flights, it is estimated that auto travel has been reduced by 2.2 % per year on average. Given assumptions on the characteristics of drivers switching modes and the types of roads they drove on, the number of automobile fatalities averted since 1978 is estimated to be in the range 200-300 per year. 2 In recent years there has been a considerable debate as to whether the deregulation of airline services in the United States has compromised safety. The debate has centered on questions of the performance of airlines brought close to bankruptcy due to competition (Rose, 1990), new entrant jet airlines (Kanafani and Keeler, 1989), and the relative safety of small "commuter " carriers who have replaced jet airlines on lightly travelled routes (Oster and Zorn