Estimating Dynamic Demand for Airlines

Diego Escobari

MPRA Paper from University Library of Munich, Germany

Abstract: This paper uses an original panel dataset with posted prices and sales to estimate a dynamic demand. We find that consumers become more price sensitive as time to departure nears which is consistent with having lower valuations. This result provides empirical support to a key theoretical implication in Deneckere and Peck [Deneckere, R., Peck, J., 2012. Dynamic competition with random demand and costless search: A theory of price posting. Econometrica 80, 1185-1247] --- high-valuation consumers purchase earlier. We also find that the number of active consumers increases closer to departure.

Keywords: Dynamic demand; Consumers' valuations; Advance purchases; Airlines (search for similar items in EconPapers)
JEL-codes: C23 D12 L93 R41 (search for similar items in EconPapers)
Date: 2014-04-18
New Economics Papers: this item is included in nep-com, nep-ind and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Estimating dynamic demand for airlines (2014)
Journal Article: Estimating Dynamic Demand for Airlines (2014)
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