The effects of commercial aviation accidents

This paper focuses on the query of whether or not aviation accidents have an effect on the financial value of the particular crash-airlines. A time span of twelve years is considered. To assess this impact a Bårdsen Error Correction Model with Newey West Standard Errors is employed, assessing both short – and long run effects of the model. The model is constructed in such a way to isolate the sole impact of accidents on the airlines’ financial value, by employing company, industry and economy indicators. For further depth of the research accidents have been divided into nonfatal and fatal occurrences, whilst assessing also the number of injuries and fatalities of the sampled mishaps. The actual number of fatalities proves to be statistically significant even during a quarter, whilst all other accident indicators used are not.