Airport, airline and departure time choice and substitution patterns: An empirical analysis

This paper uses the random-coefficients logit methodology that controls for potential endogeneity of prices and allows for general substitution patterns to estimate various demand systems. The estimation takes advantage of an original ticket-level revealed preference data set on travels from the New York City area to Toronto that contains prices and characteristics of not only flight choices but also of all non-booked alternative flights. Consistent with having higher valuations, the authors' results show that travelers buying closer to departure have a higher utility of flying. Moreover, consumers’ heterogeneity decreases as the flight date nears. At the carrier level, the authors identify which carriers have more price-sensitive consumers and which carriers face greater competition. In addition, the results suggest that the authors' multi-airport metropolitan area can be considered as a single market and that JFK and Newark are relatively closer substitutes. Overall, consumers are more willing to switch to alternative carriers than between airports or departure times.

Language

  • English

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Filing Info

  • Accession Number: 01644381
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 10 2017 3:20PM