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Eric F. Forister PhD Candidate, Economic Analysis and Policy Stanford Graduate School of Business
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Working Papers:
Measuring the Welfare Effects of Airport Capacity Expansion
[ JOB MARKET PAPER ]
Abstract: This paper uses a model of consumer demand for individual flights to measure the welfare effects of capacity expansion at airports. I estimate consumers' preferences for the characteristics of different flights, including departure time, travel time, and number of stops. This is made possible by combining existing route-level price data with newly collected data on website ticket prices of individual flights. Using this model, it is possible to evaluate the welfare effects of the airline schedule changes that result after an airport expansion. I find that the addition of a new runway at Dallas-Ft Worth in 1996 resulted in large welfare increases to consumers, with the majority of these benefits accruing to passengers in markets with an itinerary that connected through DFW.
Work in Progress:
Does Warranty Signal Reliability: Evidence from the Market for New Automobiles
Abstract: A warranty is used as a classic example of a contract that enables firms to signal quality and thus overcome the problem of asymmetric information. The difficulty of uniquely identifying the signaling effect of warranty has prevented empirical papers from confirming that warranty is signaling quality. I outline information regimes describing consumer awareness of reliability and propose testable implications for each of them. I then estimate several reduced form models of the warranty-reliability relationship in order to determine which information regime best approximates the market for new automobiles. I find that signaling is a more important explanation for basic warranty than for drivetrain warranty.
Airline Delays
There have been several recent papers that have examined flight delays in the airline industry, with significant attention paid to the relationship between competition and delay. This project examines airlines' scheduling decisions, which ultimately determine delays and observed competition, and attempts to empirically discern between several theoretical explanations of why competition would affect delays.
The Welfare Effects of Hub Airports
The prior literature has shown that hub airlines are able to charge a premium for their flights, and that this premium may be due to the quality of its product, not just an exercise of market power. Looking at how airport authorities view hubs, we see that some airports are praised for preventing the creation of a hub, while others are praised for maintaining an existing hub. Using the data and model from my job market paper, I estimate the welfare effects of hubs by looking at examples of hub dismantling due to declining/insufficient demand and due to competitive pressure (e.g. entry by Southwest).
Educational Opportunity
with Ben Ho
This exercise was motivated by a simple question: Why is it that doctors
in the United States do not finish med school until age 26, whereas in
most countries it is age 23?
More generally, the organization of a country's education system in terms
of the flexibility in career path, has implications as to student outcomes
and performance. This paper presents theory applying organization theory
to questions in education on tracking, second chances, choice of major,
etc., and then looks at empirical evidence to consider the explanatory
power of educational organization on student outcome.
Mailing Address:
Eric Forister
Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015